Licensing Fees May be Stalling Apple’s Streaming Music Service

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Apple has apparently signed up Universal Music for its rumored online music streaming service, and is close to wrapping up negotiations with Warner Music, but can't move forward because it hasn't been able to reach an agreement with Sony Music over royalty payments.

Sony stalls Apple's rumored streaming music serviceSony stalls Apple's rumored streaming music service

Rumors that Apple was close to getting Universal on board surfaced in April with reports following that the iPhone and iPad maker was close the deal when it finally agreed to royalty rates that are double what it originally wanted at US$0.125 per 100 tracks instead of $0.06.

Apple has apparently offered the labels a per-track royalty, a share in advertising revenue, and a guaranteed minimum payment over the course of the contract should streaming traffic fail to meet expected goals, according to the Financial Times. Those terms, however, apparently aren't good enough for Sony Music.

All of the companies involved are keeping quiet, so there isn't any word on exactly what it'll take for Sony to agree to a deal -- and there isn't any official word on whether or not Apple actually is working on its own streaming music service. With the popualrity of services like Pandora and Spotify, however, it seems likely that Apple is working to expand its music offerings into the subscription market.

Comments

ibuck

Would Apple launch their service once the Warner negotiations are complete?If Apple streams Warner and Universal tunes (as well as smaller labels and indy artists),  Sony would be denying their artists and shareholders a potentially rich new revenue source. Those folks would be miffed, and demand action.

furbies

ibuck, Sony would just say “Trust us. You (code for ‘We’) can do better”

Alex

Hmm, interesting. To be honest I’m not too happy with iTunes so I don’t know if I’ll be jumping the gun on this. I’m using a really good streaming site now called Torch Music so I think I got it covered in the meantime!

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