Ondrej Holzman Apple will introduce several new products during the fall, but it is also preparing for a sharp launch of its service iTunes Radio, similar to rival Pandora. iTunes Radio will also be free to use, so Apple had to find someone to pay for it all; and made deals with big brands…
Companies such as McDonald's, Nissan, Pepsi and Procter & Gamble will be behind the launch of iTunes Radio - all of them will get exclusivity in their respective industries until the end of 2013. This means that these companies do not have to worry about an advertisement appearing on iTunes Radio, for example at KFC, Coca-Cola or Ford.
However, the companies had to pay a lot for such conditions. The sums on the contracts with Apple are said to range from units to tens of millions of dollars, and everyone had to subscribe to a twelve-month advertising campaign. So it's not a cheap deal, but on the other hand, being among the handful of advertisers at the launch of a new Apple service is obviously worth it.
Next January, new advertisers will be added, and all those who want to participate must pay a one-time entrance fee of one million dollars.
Audio ads will be delivered to users using iTunes Radio free of charge every 15 minutes, video ads will be delivered every hour, but only when the user is looking at the display.
This is only for the US market for now, but when iTunes Radio launches globally in 2014, advertisers will be able to target their advertising to selected devices at a different price.
If users want to avoid any ads while listening to music, they just need to pay an annual fee for the iTunes Match service, which is $25.
I listen to itunes radio every day and it's a wonderful service, I don't notice ads much, there are very few (so far)
Pay for the unbeatable iTunes Match like I did, and it's ad-free. Totally agree that iRadio is the bomb, especially when it comes to oldies music.