Now that some version of Apple’s iRadio contract terms are available online, we can begin to do some comparisons between the effective rates contained in these terms and those rates paid by Webcasters. In this post, I will (eventually) present some simple tables that adjust Webcaster rates to account for certain affordances in the Apple iRadio contract — specifically those terms through which a stream on iRadio would not trigger a royalty obligation. What we’ll find is that because Webcasters have to pay performance royalties for skipped tracks, while iRadio will not (for the first six tracks skipped), these Webcasters may pay more for music than most people may realize.
The purpose here is to try to explain why the question of whether or not the effective rate paid by Apple under the iRadio terms will prove to be greater than or less than those effective rates paid by other webcasters ultimately relies upon the nature of user behavior (e.g., skipped tracks) and the composition of the user base (i.e., free versus paid users). I fear the “straight up” comparison between the raw iRadio and Pureplay rates being offered in most outlets overlooks these important nuances.