updated 02:07 pm EDT, Fri September 28, 2012
Per-song fees main point of contention
Apple had intended to launch its rumored music streaming service alongside the iPhone 5, but was forced to cancel plans at the last minute, sources for the New York Post claim. Talks with music publisher Sony/ATV are said to have run into a roadblock when the companies couldn't agree on a per-song rights fee. While such fees are normally measured in tenths of a penny, Sony was allegedly hoping for a higher amount.
Apple allegedly needs to negotiate with individual rights holders -- instead of copyright associations like ASCAP and BMI -- because it has loftier aspirations. The company is also said to be missing recorded music rights from labels. The end goal is reportedly a radio service with a "more human element" to finding new music, although some promotion would be based on what labels are pushing on consumers in a given month. Apple is thought to be aiming at more flexible licenses, since it wants to play artists more times than services like Pandora are able to, and point people to the iTunes Store to buy music.
It's speculated that the streaming service could be added as an iOS update in coming months. "They didn't put whatever they needed to put in the app," one source says. "It seems they were rushed into it."
On a related note, executive sources for the Post add that Sony is planning to pull out of both ASCAP and BMI in January. If true, the move would make things much harder for companies like Pandora, which can approach copyright groups and obtain the rights for vast swaths of music all at once.