It feels like the summer of 2011 all over again. Both Apple and Google were rumored to be working on a music service, and Google has beaten Apple to the punch by announcing theirs well in advance. Back then it was cloud storage. This time it’s streaming.
Earlier this week, Google unveiled its new ‘All Access’ streaming music service. And according to a new report, unless Apple can reach a deal with the remaining hold-out record labels, it’s going to again have a several month head start on Apple’s release…
In a lengthy article called ‘How Google beat Apple to a streaming music service,’ The Verge explains how Google was able to reach licensing deals with the major record labels, while Apple continues to struggle. This particular excerpt explains it best:
“How was Google able to secure deals for All Access, which was unveiled at Google I/O on Wednesday, while Apple has been stymied? For starters, Google chose to offer a standard subscription music service very similar to those built by Spotify and Rdio, and that meant the terms had largely been established, according to multiple sources close to the talks. Apple, on the other hand, is pioneering a hybrid web and radio service — one that resembles Pandora but melds it with some on-demand features, the sources said. The licensing agreement had to be created from scratch.”
The report goes on to say that Google also had an easier time getting licensed because it agreed to pay advances to some of the major copyright owners. Apple, on the other hand, typically refuses to pay advances. And it looks like that was the case this time, too.
The last we heard, Apple had bumped up its offer to the labels to $0.12 per 100 tracks—in line with what Pandora offers. It’s also willing to share a portion of its ad profits, and is guaranteeing a minimum payout over the course of the contract as insurance.
But that doesn’t seem to be enough. Universal is the only major label that has signed on with Apple. Sony, Warner and BMG are all holding out for better terms. Apple certainly has a lot of work to do if it wants to unveil its iRadio service at WWDC next month.