It’s all but officially confirmed that Apple is working on its own music streaming service similar to the likes of Pandora. Rumors have been circulating that Apple is trying to use its clout to push record companies into agreeing to a contract that would have them receiving only half of what Pandora pays them for each song played. Now, sources are saying that while Apple’s streaming service will pay record companies substantially less than Pandora upfront, it will also provide record labels with additional revenue streams that might make them more money than any other music streaming site.

Sources say that Apple’s streaming service, referred to as iRadio by the media, will provide users with a fluid and seamless way of purchasing songs off iTunes, thus increasing the amount of song sales for record companies. The service will all also work on Apple’s mobile devices, which means there will be a massive market of users on iPhones and iPads that can consume content.

iRadio will also reportedly feature occasional audio ads, with Apple splitting the revenue from these ads with the record labels.

Apple is apparently close to signing deals with both Warner Music and Universal Music Group and may lock up both of the companies by as early as this week. The company still also needs to sign Sony Music Group as well as the music publishers, all in time for a summer rollout, which is reportedly Apple’s planned launch window.

Apple’s music streaming service sounds like an exciting service for both consumers and the music industry. Record labels are only just truly starting to figure out how to make money in the digital world and signing with Apple seems like a great way to do this, while a slick Apple designed free music streaming app is something that Apple fans will eat up.