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Apple's Music Service Falls Through

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Apple's Music Service Falls Through

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Apple's new music service has stalled because the tech company decided to lowball music companies, according to reports.

The service, which was rumored to compete directly with Pandora, was supposed to be a preloaded on Apple's new mobile devices, according to the New York Times. Speaking with unnamed sources the Times said licensing negotiations with music companies broke down and the service has been delayed.

The so-called iRadio was supposed to gives listeners a free stream of music paid for by its iAds, similar to Pandora's music service that is used by 65 million regular users.

However, according to the New York Post, the deal went south because Apple offered to pay the music industry about half of what Pandora does. Pandora pays 12 cents per 100 songs and Apple was reportedly offering 6 cents per 100 songs. According to the report:  

Music label insiders suggest Apple — which is sitting on a cash hoard of roughly $137 billion — ought to pay at least the rate set by the Copyright Royalty Board, or about 21 cents per 100 songs streamed.

Other online music services  pay more, including iHeartRadio which pays 22 cents per 100 songs. Spotify pays the highest at 35 cents per 100 songs. 

If you believe the reports, then Apple looks cheap and seems willing to sabotage a relationship with over pennies. True, the pennies will eventually yield millions of dollars, but even Apple can't override the industry standard.

 

 

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