Apple’s ‘iRadio’ Plans Stalled Yet Again By Label Negotiations [Report]

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Apple’s plans for an ‘iRadio’ streaming service are still being stalled by reluctant music labels, according to a report today from the Financial Times. Last month it was reported that Universal was about to partner with Apple, and the deal has allegedly been sealed between the two companies since then. Now Sony is demanding more money before it signs on.

Despite signing up Universal Music, the largest of the record label majors, the iPhone maker is still negotiating terms with Sony Music, the second-largest recorded music group, while it is close to reaching agreement with Warner Music according to people with knowledge of the discussions.

Apple wants to use the “data it already has from hundreds of millions of iTunes users to predict the selection of tracks they will enjoy, and a plan to allow listeners to purchase songs seamlessly via the iTunes store,” according to the report.

There are three methods of generating revenue that Apple is offering to the labels: a royalty percentage for each track that is streamed, a share of advertising revenue, and a guaranteed sum out of pocket based on a pre-signed contract. Apple was originally lowballing the labels by asking to only pay out half of Pandora’s licensing fees, but now Apple is agreeing to 12.5 cents per 100 track streams.

The labels are wary of Apple for good reason; the iTunes Store turned the music industry on its head and cost label executives a lot of money. But now that services like Spotify and Rdio are gaining traction, Apple has a better shot at getting iRadio off the ground.

Rumors have been saying that Apple wants to launch its streaming service as soon as this summer if possible.

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  • Steven Quan

    iTunes cost the labels a lot of money?? What?? Napster cost the labels a lot of money. Kazaa and Limewire cost the labels a lot of money. Torrents have cost the labels a lot of money. When will these clowns pull their heads out of their behinds?? iTunes was the first totally legit form of music distribution that allowed the music labels to make money. Granted, Apple also made a lot of money, but why shouldn’t they? They came up with the idea and set up the network, why shouldn’t Apple get a cut of the profits?

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Alex HeathAlex Heath has been a staff writer at Cult of Mac for over two years. He is also a co-host of the CultCast. He has been quoted by places like the BBC, KRON 4 News, and books like "ICONIC: A Photographic Tribute to Apple Innovation." If you want to get in touch, additional contact information is available on his personal site. Twitter always works too.

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