The long rumored debut of an Apple branded streaming service is no closer to getting finalized with the company having a tough time coming to an agreement with record labels on a fee structure. The NY Post reports that Apple had offered 6 cents per 100 songs streamed, or half what Pandora currently pays in royalties. The number is significantly less than other big players, including Spotify who absorbs a rate of 35 cents per 100 songs.
The NY Times sources say Apple had been planning to introduce what insiders are calling iRadio during the Grammy Awards. That release is looking more and more like later this summer. The service would be bolstered by a dedicated app, which would be supported by iAds.
According to music executives then and now, Apple wants to preload an app on its mobile devices that can deliver a free stream of songs tailored to each user’s taste and supported through its iAds advertising platform.
Pandora currently rules the space, but that could change quickly if Apple is able to negotiate a deal for streaming services that paves the way for iRadio. The companies are looking for a higher rate per 100 songs streaming, an upfront licensing fee and a cut from iAd revenues.
iRadio would help both Apple and labels, as it would no doubt have heavy hooks into iTunes spurring on purchases. On Monday, it was reported that Apple’s CEO Tim Cook met with Beats co-founder Jimmy Iovine regarding his companies Project Daisy plans.