Apple Inc. (NASDAQ: AAPL) first tried to license music for a new streaming service in time for the iPhone 5 launch, but pushback from the industry’s largest music publisher, Sony/ATV, a division of Sony Corp. (NYSE: SNE) killed the plan. The Cupertino company is trying again, and so far the results are no more encouraging.
The New York Post reports exclusively today that Apple’s initial licensing offer to the industry was $0.06 for every hundred songs streamed. That’s half the fee paid by Pandora Media Inc. (NYSE: P) and less than a third of the $0.22 paid by streaming services affiliated with broadcast stationsq. According to the Post’s story, the highest fee is paid by Spotify, at $0.35 per hundred songs streamed.
Would the music industry love to have Apple in the fold? Darn right it would. Can Apple make any money at $0.12 per hundred songs streamed? Pandora can’t, but Apple has its own mobile advertising platform, iAds, and that offers the company another revenue source. Of course the music industry wants a piece of the ad revenues as well and a fat upfront payment as well most likely.
Google Inc. (NASDAQ: GOOG) is also negotiating with the recorded music industry for its own streaming service, and like Apple, the search giant has its own advertising platform which could help it make a profit from streaming music.