Apple, Sony unable to come to terms; iRadio is delayed
This isn't the first time that an impasse between Apple and Sony has been rumored. Earlier this year, talks between the two firms were going nowhere preventing Apple from launching its service around the Grammy Awards which were held in February. Part of the problem is that Apple had originally offered the labels 6.5 cents for each 100 songs streamed which is half the rate that Pandora pays. The labels rejected this offer and Apple subsequently raised its offer to 12.5 cents for each 100 songs streamed. It is not known how many labels agreed to that rate. The problem for Apple is that the record labels see the iRadio service as being a big hit for the Cupertino based tech giant, and feel that they should be sharing in the rewards.
For its part, Apple is said to be offering the labels a combination of a licensing fee based on the number of streamed tracks and a share of advertising revenue. Apple is also proposing a guaranteed monthly payment to the labels in case iRadio doesn't do as well as predicted. The service is expected to be offered free with Apple making money from advertising.
source: FinancialTimes via AppleInsider
1. HASHTAG (unregistered)
Okay, Apple is really greedy!
11. quakan (Posts: 1247; Member since: 02 Mar 2011)
I don't see how Apple is greedy in this situation. Apple low-balled with a ridiculous amount so that they could offer Sony the price they really wanted to pay which was right below what Pandora pays. Apple, being a big force in the industry, probably felt that since they have more market power and more access to consumers that should pay a rate less than its competitors. I'd be surprised if Apple still wouldn't be able to get a rate less than Pandora's.
12. vincelongman (Posts: 2068; Member since: 10 Feb 2013)
I hate how iCloud only backs up music, movies, books,... from iTunes, its just to try force people to buy only from iTunes. Also I wish you could stream from iCloud as well.
13. quakan (Posts: 1247; Member since: 02 Mar 2011)
Nothing wrong with that, honestly. Apple's a for-profit company so it only makes sense that they would aim for high profits. Also, Apple only allows you back up those items to their iCloud because they are strictly anti-piracy which content creators love.
16. vincelongman (Posts: 2068; Member since: 10 Feb 2013)
In my opinion their iCloud policy is very similar to DRM, and it barely helps stop piracy. At first music from iTunes had DRM, then Jobs managed to get the music companies to allow iTunes to sell music without DRM, I don't have numbers, but I reckon the removing of DRM increased sales and reduced piracy.
2. appleDOESNT.com (banned) (Posts: 456; Member since: 19 Nov 2011)
hahahah apple just lost 1.5 cents per 100 for being such freaking tools
3. roscuthiii (Posts: 1887; Member since: 18 Jul 2010)
If they were willing to go from 6.5c to 12.5c then they haven't reached the breaking point yet. Go for 15.75!
4. roscuthiii (Posts: 1887; Member since: 18 Jul 2010)
With Apple's brand recognition, they'd be signing their own death certificates with these deals. Wouldn't really make sense for any customers not to integrate into the lower-case "i" ecosystem for music.
But that seems to sum up most business anymore, no one can see past the short term profits to the doom looming just a bit further afield.
14. ardent1 (Posts: 2000; Member since: 16 Apr 2011)
Now that is a dumb comment.
The iTunes solution worked well for the music industry that was being killed by illegal downloads.
The fact remains we don't know the "facts" but the 6.5 cents number makes a hell of good sense due to the sheer size of the Apple ecosystem. Sony is going to get the benefits due to economies of scope. The Pandora ecosystem is tiny compared to what Apple can bring to the table.
17. Aeires (unregistered)
Pandora is on Android and WP, the scope difference isn't what you think it is.
19. ardent1 (Posts: 2000; Member since: 16 Apr 2011)
Aeires: You need to look at "throughput."
For example, android OS dominates the smartphone on a global scale. But if you look at the "throughput" of people buying on the internet in the US with smartphones and tablets, Apple wins hands down. It's not even close.
It's throughput, not footprint or eyeballs. Customers on the iOS ecosystem have far more disposable income, ON AVERAGE, than those on Android OS.
20. Aeires (unregistered)
Ardent1: You need to stop looking at Android users as cheap, broke people.
And while you're at it, you might want to start considering the global market and not just basing your opinions on what happens only in the US.
5. Mxyzptlk (Posts: 5210; Member since: 21 Apr 2012)
Wow why can't Sony stop being so stubborn? This is a good service.
7. Heatfan316 (Posts: 490; Member since: 21 Aug 2011)
The same could be said about Apple, you're definitely a Fanboy.
9. tedkord (Posts: 5956; Member since: 17 Jun 2009)
It doesn't exist yet. How do you know it's a good service?
15. ardent1 (Posts: 2000; Member since: 16 Apr 2011)
Answering a question with a question is considered bad form.
10. HASHTAG (unregistered)
How is Sony being stubborn? They're just not letting Apple get their way, like other companies do.
18. SellPhones82 (Posts: 569; Member since: 11 Dec 2008)
Exactly! I applaud Sony for standing their ground and not giving into Apple like every other company does. So if Apple pays half of what others pay Sony for the same service does that mean Apple will do the same to the non-subsidized price of the iPhone and sell them at half the price? Hell to the NO so why should Sony? I'm sure Sony like profits just as much as Apple though it seems to be a one way street when dealing with them...they want something for nothing then want carriers and customer to pay out the wazoo for it.
8. InspectorGadget80 (Posts: 6881; Member since: 26 Mar 2011)
Com on sony charge apple some more. They own mgm columbia studios no chance their going too let the greedy fruit get all the profits