By now, you’ve probably heard the rumors that Apple is working on a Pandora-like internet radio service. Yesterday, Bloomberg added to the speculation, saying that a deal with record labels could be reached by mid-November.
But according to a follow-up report, that may not be the case. Apparently, some record executives haven’t been particularly impressed with the revenue sharing proposal. And they want Apple to sweeten the deal before they sign…
“Bloomberg reported this afternoon that Apple’s negotiations with the three top labels have “intensified” over an ad-support Web radio service that Apple hopes to launch early next year. But music industry executives who spoke with CNET said that some decision makers at the big record companies want Apple to sweeten the offer.
The negotiations are ongoing so the terms could change, but the sources said Apple has offered to pay a lower royalty rate than Pandora pays even though it wants to provide iTunes users with the ability to do more with the music than Pandora’s customers enjoy.
In exchange for this greater flexibility with songs, Apple is offering a percentage of the ad sales generated by the service. CNET’s sources say that some of the sector’s leaders don’t believe the cut Apple put on the table is big enough. Others in the music industry, however, argue it’s good for the overall business if Apple takes on Pandora.”
It’s not surprising that record companies are pushing back on Apple executives in negotiations. We heard similar talk last summer as the Cupertino company hashed out iCloud and iTunes Match deals with the four major labels.
Back in early September, The Wall Street Journal reported that Apple was working on an iAd-supported streaming music service that would take on the likes of Pandora and Spotify. We’ve since heard several corroborating reports.
So it sounds like this thing is really going to happen; it’s just a matter of when at this point.