Apple has been rumored as working on an streaming music (“internet radio”) service since reports surfaced in mid-2012 (1, 2, 3) – but according to a new report from The New York Post, the new service may not launch as early as Apple had hoped. Interestingly, the report claims that the service has been stalled largely because Apple is pinching pennies quite a bit tighter than record labels are comfortable with.
Apple has opened talks with record labels about getting rights for a music-streaming service — but has gotten plenty of push back because its offer is seen as way too cheap, The Post has learned.
The tech titan, the most valuable company in the world, made an initial offer to the label of about 6 cents per 100 songs streamed, sources said. That’s about half of the 12 cents per 100 songs paid by Pandora, the leading online radio service that Apple is taking aim at, sources said.
“Apple wants a rate that is lower than Pandora’s,” said one high-level executive.
Other streaming music companies, such as iHeartRadio and Pandora, pay between 22 and 35 cents for every 100 songs stream, leaving Apple’s offer just barely beyond the comfort barrier. Apple had reportedly planned to launch the service in early 2013, but due to the stalled negotiations, The New York Times reports it has now been delayed until at least this summer. Likewise, Bloomberg reports that the service is now planned to launch by the end of the year.
With multiple reports all backing the delay, and considering Apple’s historic habit of aggressively negotiating pricing contracts, I see no reason to doubt that the reports are indeed accurate. It’s still ultimately disappointing, however, that Apple isn’t willing to offer up a tiny bit more of it’s remarkably large cash pile to launch the service closer to when they had initially planned…
