By Carolyn Heneghan

The date has been set: Sept. 18th will be the official release of several new Apple products, including the flashy iPhone 5S, the rainbow of iPhone 5Cs, the iOS 7 and, of course, iTunes Radio. iTunes Radio didn’t get much airtime at Apple’s conference on Tuesday, but the little it did still pointed us in the right direction as to what to expect in terms of performance, features and competition.

Some analysts have pointed out the lack of innovation of iTunes Radio as compared to one of its main competitors, Pandora. They wonder if the similarities between the two will not be enough to woo users of Pandora, Spotify, iHeartRadio, etc. to change over to iTunes Radio, or at the very least, add the new service to their regular music streaming routines.

What Do Consumers Want?

In an interview with Hypebot, Jason Herskowitz, core contributor to the multi-source music platform Tomahawk, relayed this impression of the mainstream music streaming customer:

“I think the average, mainstream, music consumer is a very lean back consumer. These are not the guys that are the on-demand subscribers, these are the guys that want a big play button. They hit play, lean back, and go about their business. They are looking for an out of the way, programmed experience that requires very little work for them.”

It appears that what consumers really want is the easiest, most convenient music streaming service out there—one they don’t have to pay attention to once they start it. Whether iTunes Radio will provide that ease of use over Pandora or other services like Songza—who completely takes the music playlist debate out of the experience by having the consumer simply choose an activity—is key.

Features of iTunes Radio

At its foundation, iTunes Radio is a free, ad-supported music streaming service for iPhones, iPod Touches, iTunes on Macs and PCs and Apple TV.

Users will access iTunes Radio via a Radio tab in the iTunes mobile app and desktop client, as well as for Apple TV. The service will have more than 200 genre-focused stations plus branded stations that sponsors have paid for, which will be rolled out eventually, if not at launch.

Like Pandora, iTunes Radio will learn about the listener via his or her music collection and song choices as the listener streams music. To differentiate itself from Pandora, iTunes Radio has a star icon instead of a thumb up/thumb down function, though it appears that selecting the star will be much like Pandora’s thumb up feature anyway. Other user feedback will also be taken into account, such as options for “Play More Like This” and “Never Play This Song.”

As for iTunes Radio features not found on Pandora, the horizontal slider changes the amount of Top Hits versus Discovery songs, though Slacker and SiriusXM do offer a similar feature for fine-tuning music discovery. iTunes Radio has a “Wish List” function that will both allow listeners to view songs that they have seen on more than one channel and make buying tracks easier. iTunes Radio also activates Siri, to which a listener can say, “Play more like this,” or “Who sings this?”

Perhaps one of the most compelling features of iTunes Radio is its integration with iTunes Match, Apple’s cloud service. iTunes Match will store songs that a listener purchases on iTunes Radio in addition to the rest of the listener’s music collection. And while iTunes Radio will be run with ads, iTunes Match—at $24.99 a year—offers an ad-free version of iTunes Radio. This is an interesting feature, as it sets itself apart from ad-free subscription Pandora One, which costs $36 a year, and Xbox Music Pass, which costs $99.99 a year.

Microsoft Hatches a Streaming Plan of Its Own

Xbox Music and its 30 million tracks originally were exclusively on Microsoft devices such as the Xbox 360, Windows phones and the Windows 8 desktop. But with the poor reception of Windows 8, Microsoft needed a new way to reach its customers.

And so on Monday—just the day before the iTunes Radio announcement—Microsoft announced that Xbox Music will be available for free on the Web, ad-supported, and will no longer require an Xbox console or Windows 8 OS.  In addition, the company has also released new apps for iOS and Android so that their customers can stream music on their mobile devices as well.

The only caveats are that listeners will have unlimited access to the free Web version for the first six months, and after that they will be limited to 10 hours a month. However, Microsoft hopes by then that it will have hooked users enough to encourage them to buy the Xbox Music Pass, which costs $9.99 a month. Also, to use the iOS and Android apps, users must have the Xbox Music Pass.

This sudden expansion of Microsoft’s music streaming platform may be arguably tied to Apple’s iTunes Radio official announcement, which was slated to occur just the very next day. Microsoft seems to imply that the change is due to Xbox Music’s approaching one-year anniversary, but the expansion really comes as no surprise.

The Competition

Competition is steep, as services like Pandora and Rhapsody have been around for 13 and 12 years, respectively, and Pandora especially has a strong market position. In August, Pandora’s 72.1 million active users, almost all in the U.S., streamed 1.35 billion hours of music. Earlier this year, Pandora reported having 200 million registered users total.

However, iTunes Radio comes with a large Apple customer base of at least 575 million iTunes customers worldwide. This built-in customer base may prove extremely beneficial for the new service, erasing doubts that it had come into the music streaming scene too late to make a difference.

Another difference between Apple and its chief competition, Pandora, is that Apple’s deals with record labels call for the company to pay 0.13 cents for every song streamed on iTunes Radio during its first year of operation, while Pandora’s current rate is 0.12 cents. This may make iTunes Radio more attractive to music companies, who will also receive a portion of iTunes Radio’s advertising revenue. This may result in more exclusive music streaming deals with iTunes Radio, just out of Pandora’s reach.

Being released as part of the iOS 7 on Sept. 18th, iTunes Radio is expected to make waves in the music streaming market. How big those waves are, we’ll have to wait and see.

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