Here comes Apple's iTunes Radio

With the arrival of iTunes Radio, which comes out this week with the release of iOS 7, Apple is poised to tackle the streaming music market like no other entrant before it.

It's shaping up to be quite a big deal. Not only will iTunes Radio pose the biggest threat to Internet radio king Pandora to date, as I argued here, but Apple now will get an opportunity to recast a decade-old debate about the respective roles of man versus algorithm when it rolls out this new piece of streaming music software. Apple has built a service in its own image that, to a large degree, leans on taste makers as well as algorithms.

In a still-young digital music industry, everyone from Spotify to Google is trying to figure out the best way to help music fans discover new music. Yet so far, most people are discovering music the old fashioned way -- via FM radio.

So here comes Apple, which very much wants to be your DJ -- albeit with a heavy dose of your iTunes behavioral data mixed in. And the big music labels, working closely with their largest digital partner, are rooting for Apple's success. iTunes Radio will roll out with 300 or so genres, from hip-hop to country and Doo Wop. It also let's you enter an artist's name -- a la Pandora -- to build a station, and it does so for free with ads.

Because this is Apple, the potential stage is global, even though iTunes Radio is rolling out initially in the US only. The agreements Apple has with the music labels and publishers generally give it rights to the countries where iTunes operates, which is now in 119 territories -- many of those are countries that have no Internet radio service at all. Pandora, meantime, operates only in the U

For the music labels, the hope is not just that Apple lures people from Pandora -- the company has a rocky relationship with the labels -- but that iTunes Radio pulls millions of people from the FM dial over to streaming radio, a more lucrative place for the labels.

"We're hoping Apple shakes up the entire radio market," said one top digital music executive speaking on the condition of anonymity.

That's also Apple's goal. In the runup to this week's rollout, for instance, Apple has asked all the major music labels for their "heat seekers" lists, according to people familiar with process. Those are the lists the labels keep of artists and songs they're betting are on the verge of breaking -- even though the data might not yet point to succes