Apple's direct licenses with labels give iTunes Radio some financial advantages over its competitors. Although iTunes Radio will probably pay out larger royalties than Pandora, Apple won't have to pay for numerous kinds of streams.

In the early years, until Apple generates significant advertising revenue, labels will likely be paid the minimum rate under the iTunes Radio licensing agreement. At $21.25 per 1,000 listener hours ($22.25 after the first year), and assuming an average song length of four minutes, the average per-stream royalty will be 0.142 cents.

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