Subscribe / Unsubscribe Enewsletters | Login | Register

Pencil Banner

Apple's iRadio delayed by 'cheap' offer that left record labels unhappy, reports say

Ashleigh Allsopp | March 11, 2013
Apple's rumoured music streaming service, dubbed iRadio, is being held up by record labels who aren't happy with Apple's "cheap" licensing offer, reports say.

Apple's rumoured music streaming service, dubbed iRadio, is being held up by record labels who aren't happy with Apple's "cheap" licensing offer, reports say.

According to a The New York Times report published on Thursday, Apple wanted to launch the service early this year, but its struggle to come to an agreement with music companies has pushed it back to summer at the earliest.

NYT cites "a number of people briefed on the talks" who say that Apple's internet radio service, which would compete with the likes of Spotify and Pandora, will come in the form of an iOS app that is tailored to the users' taste in order to deliver a free stream of songs. Apple would support the service through its iAds advertising platform.

The sources claim that Apple had planned to launch 'iRadio' in February, around the time that the Grammy Awards were taking place, but "slow progress" in licensing negotiations with record labels and Sony/ATV, which covers artists including Taylor Swift, Bob Dylan, Gary Barlow and many more, forced the company to delay the service's roll out.

Apple has, however, been able to get licenses for most songs through music industry performing rights organisations such as ASCAP and BMI, says the report.

On Thursday, The New York Post also reported that Apple is struggling to strike deals with record labels due to its "cheap" offer of about 6 cents (4p) per 100 songs streamed. Pandora is believed to pay record labels double that, at 12 cents per 100 songs, say the Post's sources, who claim Spotify pays even more, at 35 cents per 100 songs streamed.

"Apple wants a rate that is lower than Pandora's," a 'high-level executive' told the Post. Music label insiders reportedly believe that Apple should pay at least 21 cents (14p) per 100 songs streamed, which is the rate set by the Copyright Royalty Board.

The Post's report reiterates the belief that Apple plans to use iRadio as a way to make better use of its iAds platform, but says that music labels are asking for an upfront fee and a percentage of the ad revenue made through the service, on top of the streaming fees.

Apple, Google and Amazon are all looking at ways to get into music in a bigger way, BTIG analyst Rich Greenfield told The Post. "People spend two hours a day listening to radio," he said. "Everyone's trying to figure out a better structure. I wouldn't say any of them are giving up."

Apple's rumoured 'iRadio' has been hot topic this week, with earlier reports suggesting that Apple CEO Tim Cook has shown interest in Beats' upcoming 'Daisy' music streaming service, which is set to launch later this year.

 

1  2  Next Page 

Sign up for CIO Asia eNewsletters.