Apple’s iRadio Hampered by Royalties Negotiations

Sony is holding out as launch date approaches

Apple's iRadio talks have been hampered by royalties negotiations, Forbes reported.

Set to launch this summer, Apple's iRadio will be a service similar to Pandora, but with more features such as a purchasing button and the ability to fast-forward and rewind tracks. Apple struck a licensing deal with Universal Music Group on Thursday but is still in negotiations with Warner Music Group and Sony. The Financial Times said that Sony, which is balking at Apple's proposed royalties rate, could hold up the launch of the music-streaming service.

Sony wants Apple to pay at a rate similar to Pandora's 12.5 cents for every 100 tracks streamed. Apple is offering a royalty per track streamed, a 50 percent share of iRadio's revenue and a guaranteed minimum safety net payment. This three-pronged revenue model could prove more lucrative for music companies than Pandora's offering. Furthermore, a "buy now" button would attract consumers to the iTunes store, where music companies get a cut of every download.

Nonetheless, Sony execs know that Apple needs all the record companies to be on board, so the company continues to play hardball.

The delay could give an advantage to Apple rival Google, which is poised to launch its own streaming service via YouTube this summer. Google might also release a subscription music service for Google Play soon that will be similar to Spotify and other on-demand music streaming services.