Report: Apple's Upcoming iRadio Music Service Has Hit a Snag

Illustration for article titled Report: Apples Upcoming iRadio Music Service Has Hit a Snag

We've heard that Apple was supposedly close to locking down two major music labels for its 'iRadio' streaming music service and that Cupertino was waiting on Sony to finish off the trifecta. Unfortunately, Apple is still waiting on Sony. The Financial Times reports that Sony is holding firm because it wants Apple to pay more than Pandora does.


According to FT, Sony's reasoning is that Apple should pay more because of its "broader ambitions for iRadio" when compared to Pandora. I'm guessing, Sony wants to get a better deal just in clase iRadio becomes the next iTunes. Apple is offering music labels a royalty per song streamed, a share of iRadio's ad revenue and a guaranteed minimum sum (just in case iRadio doesn't take off).

Apparently, Apple first offered 6 cents for every 100 tracks streamed but has raised that offer to 12.5 cents for every 100 tracks. That's what Pandora's rate is set at. And until Apple and Sony figure out how many cents they're both willing to give each other, it looks like iRadio needs some more marinating before it's ready. [Financial Times via Verge]

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Apple's argument is probably along the lines of "we have the greatest share of music consumers in the world and we can deliver far more revenue than Pandora, therefore we should get a discount". It's a fair argument.