Apple's rumored iRadio service could be delayed until summer

Apple's never formally announced its iRadio streaming music service, but details have been creeping out for months. A new report suggests iRadio could be delayed for a few more months while Apple negotiates royalty rates with record companies.

By , Contributor

iRadio might be Apple's worst-kept secret: the company's never announced it (or named it), but details have been trickling out for months of a Pandora-like music service that would come installed on iOS devices and would serve up a free, personalized stream of tunes. Leaks suggested that Apple was hoping to unveil iRadio early this year, but now a report from the New York Times says we probably won't see it until summer at the earliest.

It all comes down to label negotiations, according to the Times. In order to operate iRadio, Apple has to secure record labels' permission to play the songs in their catalogues. That means paying the labels a small amount of money for each song played on the service (and, hopefully, making that money back through ad sales). But the Times says those negotiations haven't been going well. Sony/ATV is allegedly giving Apple a particularly tough time, which isn't surprising: back in January, the company successfully negotiated a 25 percent increase in royalties from Pandora.

A separate report published in the New York Post outlines more of what's tripping iRadio up: according to anonymous sources, Apple is offering a royalty rate of six cents per 100 songs streamed, half of what Pandora pays (12 cents per 100 plays) and about a sixth of what Spotify pays (35 cents per 100 plays).

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It's possible that Apple is playing a long game here, rather than simply trying to lowball the record companies. Thanks to the ubiquity of the iTunes store the company controls about two-thirds of the market of (legal) downloadable music, which gives it some extra negotiating muscle. And there's always the possibility that Apple has something more up its sleeve than a simple Pandora competitor, since similar services abound already -- Rdio, Mog, Spotify, iHeartRadio, and a host of others.

There's one more piece of evidence that Apple had hoped to launch iRadio already: tech site 9to5Mac found some code earlier this month that suggests a "Radio" feature will eventually be activated on iTunes for iPads and iPhones. If you're using iTunes on a computer or iPod, you might already be familiar with Radio, but because the iPad/iPhone code includes a "buy" button, there may be some extra features afoot.

The standard warnings apply here, of course: both the Times and the Post got their information from "people briefed on the talks" between Apple and record companies, so the reports shouldn't necessarily be taken at face value. Nevertheless, these sources all point in a similar direction: to get iRadio off the ground, Apple might need to offer a higher royalty rate to the music companies.

For more tech news, follow Jeff on Twitter@jeffwardbailey.

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