The company’s in the early stages of negotiating with the major record labels for the service, according to the Wall Street Journal.
And, unlike Pandora, Apple hopes that these licenses will allow it to offer users the ability to play tracks as often as they like.
The service would presumably be linked to iTunes, and would come in the form of a preinstalled app on the company’s mobile devices. It would carry advertising, but might still be a paid-for service; Pandora offers a free service with ads, or a paid-for one without.
The internet radio business still isn’t big – less than $1 billion a year. Pandora, the biggest such service, has never managed to turn a profit, largely because it has to hand over 60 percent of its revenues to content owners.
Spotify, meanwhile, is turning a profit on its subscription business, according to research firm Enders Analysis, but is failing to break even on its advertising-supported version.
But mobile music in general is a growing area, with Nokia this week launching Nokia Music, a free streaming service. And Apple’s size gives it more clout than most, making it more likely that the comapny can negotiate more favorable licensing terms than its competitors.