iRadio Delayed by Lowball Royalty Bid by Apple

Hot on the heels of Apple’s meeting with Beats to talk about streaming music services, the New York Post claims record labels have rejected the terms proposed by the Cupertino company.


The NYP’s sources have learned that Apple has offered to pay 6 cents per 100 songs streamed, which is half of what Pandora pays labels to secure the same rights. By comparison, iHeat pays 22 cents per 100 songs streamed, while Spotify pays 35 cents per for the same rights.

Music label insiders suggest that Apple should pay no less than the rate set by the Copyright Royalty Board, or at least 21 cents per 100 songs streamed.

Apple is motivated to enter into the streaming radio business, as it has seen 50% of its iTunes revenue coming from mobile, with Pandora being among the most popular apps for iOS.

Also, the iRadio (or whatever its name will be) could boost its iAds advertising platform, as it would be ad-supported. The service would be available in the UK, Germany and France, as well as other places, the NYP sources learned.

Rich Greenfield, media analyst with BTIG, told The Post, “People spend two hours a day listening to radio. Google, Apple and Amazon are fascinated by the opportunity to get into music in a bigger way. Pandora doesn’t make any real money.”

Greenfield added: “Everyone’s trying to figure out a better structure. I wouldn’t say any of them are giving up.”

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