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RAIN 2/22: Apple subscription policy "could delay Pandora IPO," reports NY Post

Posted on: 02/22/2011


Apple’s controversial App Store subscription policy — already drawing fire from Last.fm and Rhapsody and causing the FTC and Justice Department to begin preliminary anti-trust investigations — could hurt Internet radio leader Pandora. The New York Post reports Apple’s new policy could even delay Pandora’s IPO.

That’s according to an unnamed source “connected with one of the underwriters of Pandora’s public launch.” The source said, “Apple has crossed the line. They are either going to have to walk this back, or face enforcement action or a lawsuit.”

The problem stems from two requirements from Apple. The first is that Apple gets 30% of any subscription made within an iPhone app. That apparently includes subscriptions to newspaper services, to radio services like Pandora or Last.fm, or even to aggregation services like Readbility (which just had its app denied over this policy).

The second is that any service that offers a subscription, even outside Apple’s realm of control, must offer the same subscription at the same price within their iOS app. So Pandora and other services don’t get to decide whether an in-app subscription makes fiscal sense for them — it’s a requirement.

However, it’s not yet clear how Apple will apply this policy. A recent email from Steve Jobs implies some services will be exempt, as Wired reports (here). “One thing is clear, however,” writes Wired , “if Apple does charge music subscription services 30 percent for selling their subs in iTunes, they will almost certainly lose money on each subscriber.”

Rhapsody has said they will lose money on every new subscription (RAIN coverage here). Last.fm’s co-founder said, “Apple just f$&#!d over online music subs for the iPhone…many services can’t survive a 30 percent loss of revenue,” (RAIN coverage here).

Why would Apple pursue a policy so apparently harmful to its developer community? “There is broad fear among music services that Apple is trying to squash them ahead of launching its own similar service,” writes the Post. Read more here.


New technologies like Internet radio helped drive up aftermarket car audio sales in 2010 “for the first time in years and will probably do so again this year,” writes Twice.com.

Aftermarket car audio sales rose by over 11% in 2010, the Consumer Electronics Association (CEA) stated, “following 3 consecutive years of double-digit declines.”

Rob Elliott, the executive director of car stereo buying/marketing group In Car Experts, said that “momentum will continue in 2011 with the dramatic expansion of Internet radio into a wider range of head units at more affordable prices.”

Twice.com has more coverage here.


Slacker earlier this month launched new pre-programmed Latin channels. Programmer Jackie Madrigal tells EFE, “The increase in Spanish-language radio stations is a trend related to the growth of the Hispanic population in this country.” Fox News picked up the story, which you can read here.

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