Apple to Sell Video Ads on TVs (But Not TV Ads)

iTunes Radio Will Include Video Ads and be Pre-Loaded on Apple TV

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Apple hasn't yet gone into the TV business, but it will soon be selling video ads on televisions.

ITunes Radio, Apple's free streaming music service available due out this fall, will include video advertisements, according to a source briefed on their plans. Once launched, the service will come preloaded on a slew of Apple devices including Apple TV, marking the first time Apple has sold ad space specifically designed for televisions.

All iTunes Radio ad inventory will be sold through iAd, the Apple ad network that, until now, was catered solely to serving ads on iPhones and IPads. Apple recently redesigned its iAd website to tout its new TV-based ad products.

Apple CEO Tim Cook
Apple CEO Tim Cook

"Showcase your best spots, hottest trailers, and most entertaining content with in-line video playing within iTunes Radio on Apple TV," the site says.

Video ads typically cost anywhere between $10 and $35 per thousand impressions on mobile devices, with tablet ads commanding a higher price because of their larger screen size. iAd's Apple TV ads could be priced higher, in line with video ads on Hulu.

Apple TV, Apple's set-top box that brings apps and Internet connectivity to television sets, has sold 13 million units to date, with half of those sales coming within the past 12 months, CEO Tim Cook recently said.

ITunes Radio will also come preloaded on all devices running iOS 7, Apple's new mobile operating system, meaning iAd will be selling video ads optimized for iPhones and iPads. Apple showcased iOS 7 at its company's Worldwide Developers Conference last week saying it will be available this fall.

"Offering in-line video, pre-buffered audio, interactive creative, and exceptionally accurate targeting, iAd brings the best of advertising to iTunes Radio," the iAd website says.

IAd will also serve video ads to consumers using iTunes Radio on Apple PCs. Apple computer owners will have to download new operating system OS X Mavericks when it becomes available this fall. Windows users will be served iAd video ads as well: ITunes Radio will be available to them when the new version of iTunes for Windows becomes available for download this fall.

In addition to interstitial video ads, iTunes Radio will include audio ads, as Ad Age reported two weeks ago.

Consumers can disable iTunes Radio ads -- audio, video, banner or otherwise -- by paying $24.99 for a yearly subscription to iTunes Match, a cloud-based music storage feature that allows users to play songs purchased through iTunes on-demand on any Apple device.

Apple declined to comment. It's iAd team is currently in Cannes presumably pitching its new audio and video ad products to ad execs.

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