Apple Trying To Undercut The Going Rate For Streaming Radio, Report Claims

Just after reports peg Apple brass as meeting with Beats to discuss streaming music services, a new story in the New York Post today claims that the Mac maker is in talks with labels about such a service, but is already hitting a lot of resistance over its proposed terms. Apple initially offered 6 cents per 100 songs streamed, according to the Post’s sources, which is around half what Pandora reportedly pays.

The Post’s sources provided info on what other competitive services are paying out to labels in order to secure rights, and Pandora comes in lowers at 12 cents per 100 songs streamed. iHeart pays around 22 cents per 100 songs streamed, and Spotify pays 35 cents per 100 tracks played, the highest according to the Post. Apple sees the popularity of Pandora and others, and also wants to include iAds in a streaming service to make it ad-supported and boost that aspect of its business, the sources said.

iRadio, as the service is apparently being dubbed, would be a significant help for Apple on mobile devices, as a supplement to, not a replacement for, traditional direct digital media sales. And we’ve heard from other sources that Apple previously felt that the asking price from label for streaming licenses was too high, something which apparently caused Apple founder and former CEO Steve Jobs to turn down an early proposal from music mogul Jimmy Iovine to launch a streaming service years ago. That Apple is in negotiations to bring such a service to market now, and that it still wants to bring label commissions down for streaming plays, both make a lot of sense.

Labels are looking for an upfront fee and a portion of Apple’s ad revenue in addition to any fees it collects from streaming, the Post claims, which is probably not helping the two bodies get any closer on a deal. And this isn’t the first time we’ve heard that Apple was in negotiations with labels around streaming music and ad revenue sharing. But the newfound specificity of these reports suggests things are getting to a point where some involved might be hoping to use media coverage to argue their side. We’ve reached out to Apple for official comment on the matter, and will update if they provide any.

The Post says that negotiations are proceeding, with both sides preparing counters. Google appears to be getting closer to a YouTube music streaming service deal, too, so that could be adding some urgency into the mix for Apple. Either way, it feels like the time is past due for one of the operators of the biggest media ecosystems on the web to enter the fray.