Apple announced the existence and core feature set of iTunes Radio back in June, but now we have an idea of how the free personalised internet radio service will be funded.
Users who pay £21.99 a year for iTunes Match, which stores all of your music in the cloud, will get to use iTunes Radio uninterrupted.
However, according to a recent AdAge article, the majority of iTunes users who do not pay for iTunes Match will have to sit through periodic adverts to use the iTunes Radio service.
Every 15 minutes an audio ad will play, while a video ad will be initiated every hour. They will only play when a user is likely to be looking at their device, such as when hitting play or skipping a track.
So far, a number of high profile companies have signed up to flog their wares on iTunes Radio in this way. These include McDonalds, Nissan, Pepsi and Procter & Gamble, according to people familiar with the negotiations.
The service is expected to launch in September alongside Apple’s new iOS 7 and two new smartphones, the iPhone 5S and the iPhone 5C. These major companies will have the advertising airways of iTunes Radio pretty much to themselves for the first four months of its existence.
Then, in January 2014, iTunes Radio advertising will be opened out to other companies – provided they stump up the alleged $1 million minimum buy-in.
Apparently, the cost of advertising on iTunes Radio will depend on the size of screen companies want to target, with the tiny iPhone being cheapest and Apple TV the most expensive.
Next, read our iTunes Radio vs Spotify comparison feature.