June 2, 2013
Apple Is Said to Be Pressing for Internet Radio Deals
By BEN SISARIO
NY Times
http://www.nytimes.com/2013/06/03/technology/apple-is-said-to-be-pressing-to-complete-deals-for-internet-radio.html
After months of stalled negotiations over its planned Internet radio
service, Apple is pushing to complete licensing deals with music
companies so it can reveal the service as early as next week, according
to people briefed on the talks.
Apple’s service, a Pandora-like feature that would tailor streams of
music to each user’s taste, has been planned since at least last summer.
But Apple has made little progress with record labels and music
publishers, which have been seeking higher royalty rates and guaranteed
minimum payments, according to these people, who spoke anonymously about
the private talks.
While it is still at odds with some music companies over deal terms,
Apple is said to be eager to get the licenses in time to unveil the
service — nicknamed iRadio by the technology press — at its annual
developers conference, which begins June 10 in San Francisco.
Apple has signed a deal with the Universal Music Group for its recorded
music rights, but not for music publishing — the part of the business
that deals with songwriting. Over the weekend, Apple also signed a deal
with the Warner Music Group for both rights. It is still in talks with
Sony Music Entertainment and Sony’s separate publishing arm, Sony/ATV,
whose songwriters include Taylor Swift and Lady Gaga.
Representatives for Apple and the music companies declined to comment.
Apple’s Internet radio feature is expected to be free and supported by
advertising, and would represent a relatively late arrival by the
company into what has become a fast-growing — if low-margin — sector of
the music business. Pandora has more than 70 million regular users, the
vast majority of whom do not pay, and similar features have been
introduced by Google, Spotify and the radio company Clear Channel
Communications.
The licensing fees paid by Pandora have been a sore spot for music
companies, which see promise in Apple’s service, particularly since it
can be linked to sales through Apple’s iTunes store, but want higher
rates. Publishers, for instance, are paid about 4 percent of Pandora’s
revenue, but want as much as 10 percent from Apple.
Apple is said to be negotiating directly with the music groups because
it wants more extensive licensing terms.
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