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Apple's iRadio talks stall as Google rushes to license new music service

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Apple and Google are racing to launch new music services but Apple is getting tripped up by one of the labels.

Old Motorola radio stock 1024
Old Motorola radio stock 1024

Apple's effort to license a proposed online radio service, which the press has dubbed iRadio, is being stymied by at least one of the major music companies, multiple industry sources have told The Verge.

The Financial Times reported today that Apple's negotiations with Sony continue to drag on and that the electronics maker could hold up the launch of what sources say will be a radio service similar to Pandora, the internet's top webcaster, but offer more on-demand listening features, such as fast-forwarding and rewinding.

Any delay of iRadio could hand one of Apple's chief rivals an opportunity to beat it to market. In recent months, Google has pushed hard to acquire licenses that would allow the company to launch a Google Play-based subscription music service sometime this summer, numerous industry insiders say. That service is expected to be more akin to Spotify and offer on-demand music listening. While it doesn't appear that Google has acquired all the necessary licenses, Google's I/O conference is next week. That certainly would be a good place to unveil a new Google Play music service. Any delay of iRadio could hand one of Apple's chief rivals an opportunity to beat it to market

Sources say iRadio could still launch ahead of Google Play. Last month, The Verge reported that a licensing agreement with Universal Music Group was imminent, and the FT reported today that the deal was done. As for Warner Music Group, sources with knowledge of the talks say that "the structure" for a deal is in place but that the sides continue to hash out terms. The sources didn't know whether its Sony's recorded-music division or publishing unit that is balking at the terms Apple has offered but the FT reported that Sony execs want Apple to pay more than Pandora. According to multiple sources, Apple has agreed to pay a similar amount to the 12.5 cents Pandora pays for every 100 tracks it streams. In addition to the per-stream payment, the FT said that Apple has agreed to hand over a share of ad revenue as well as pay a guaranteed minimum sum.

The structure for a deal with Warner is in place but that the sides continue to hash out terms

Google and Apple, the largest music retailer in the world, each currently sell music downloads, but both are trying to catch up to the new "access models." Pandora and Spotify stream music over the internet to wherever a user can connect to the web and unlike downloads, the songs aren't stored on a user's hard drive. With Pandora, the songs play randomly, similar to traditional radio. At Spotify, users are allowed to choose the songs they hear. Keep in mind that Pandora and Spotify have yet to report any significant profits, and it's uncertain whether either business model can make money. Nonetheless, ubiquitous access to songs appears to be where music listening is headed.