Last year rumors indicated that Apple was working on a streaming music service to be launched in the first quarter of this year, but The New York Times is now reporting the service has been delayed until summer at the earliest. According to the Times, it's all due to an inability to close the deal on crucial licensing agreements. Apple has been able to obtain many of the licenses it needs through ASCAP and BMI, two music industry performing rights organizations. Sony / ATV Music Publishing, however, recently pulled digital rights for acts it covers from the two groups, putting streaming music services in the position of having to negotiate with Sony / ATV one on one. The company covers a wide variety of artists, including the likes of Fun., Taylor Swift, Paul McCartney and Skrillex.
A recent report from the New York Post describes similar troubles. According to the publication's sources, Apple has offered up six cents for every 100 songs streamed as an opening bid. The record labels reportedly see that as far below the going market rate, with Pandora's rate listed as 12 cents for the same number of songs; Spotify is pegged as paying 35 cents per 100 songs. The notion of royalty rates for internet radio has been a hot-button topic lately, with Pandora publicly supporting legislation last year that it said would level the playing field between terrestrial radio and music streamed online. As part of that discussion, Pandora revealed that it paid over half of its annual revenues in royalty fees in 2011, while Sirius XM paid just 7.5 percent.
Of course, it's important to note that the Post calls Apple's offer an opening bid, so there will no doubt be many rounds of discussion to follow. Apple reportedly met with Beats about its upcoming streaming music service — code-named Daisy — with the service's business model said to be one particular area of interest for Apple CEO Tim Cook. Whether that insight will be enough to help Apple and the outstanding labels come to an agreement still remains to be seen.