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Apple iRadio service faces royalty delays

The Apple iRadio service has hit delays due to its negotiations with Sony Music over royalty prices for the tracks it could provide.

Apple’s much-anticipated radio streaming service could be facing delays, stalled by royalty discussions with Sony Music.

A deal has already been struck with Universal Music, the largest of the three major record labels, and according to “people with knowledge of the discussions,” Apple is very close to closing negotiations with Warner Music for Apple iRadio.

However, talks with Sony Music are apparently causing Apple some issues over royalty fees. The Cupertino company supposedly first offered the second largest music label 6 cents (4p) for every 100 tracks streamed on the Apple iRadio service, but Sony Music is asked for 12.5 cents (8p). This fee would be in line with what rival radio streaming service Pandora currently pays.

It is unknown what royalty fee was agreed between Apple and Universal.

Pandora had 70 million “active listeners” recorded in April and the competition from Apple iRadio could cripple the service. Due to this, some music industry executives think it only fitting that wealthy Apple should pay more in royalties to give Pandora a fighting chance.

According to the “people with knowledge of the discussions,” Apple is offering the music labels three different revenue stream options: a share of iRadio advertising revenue, a royalty per track streamed and a guaranteed minimum pay-out if the first two should prove unacceptable.

One of the key appeals of Apple iRadio is its supposed ability to create a radio station full of tracks users will like using their iTunes Store purchase history. Apple also plans to integrate iTunes within the iRadio service, meaning listeners can buy tracks they like on iRadio through the store.

iTunes has been the top music store in the UK since 2008, with over 25 billion songs downloaded as of February this year.

Rumours of the Apple iRadio service surfaced online quite some time ago and it was predicted to launch at the annual WWDC next month, but these music label negotiation issues may cause release delays.

You can expect Apple iRadio to become a big part of the Apple iPod range, including the colourful iPod Touch 5th Generation model.

Via: Financial Times

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