The New York Post has an exclusive today about Apple's attempts to get rights from record labels for a proposed music streaming service, which are apparently falling on deaf ears because its offer is "seen as way too cheap."
A high-level executive at one label told the Post that "Apple wants a rate that is lower than Pandora's," and the numbers don't lie. Pandora currently pays a royalty of US$0.12 per 100 songs streamed; Apple's initial offer was about 6 cents per 100 songs streamed.
Spotify currently pays the highest royalty rates at about 35 cents per 100 songs streamed, and the Post notes that music label insiders think that Apple should pay at least 21 cents per 100 songs. That's the rate set by the Copyright Royalty Board for companies that don't own broadcast operations.
The Apple streaming service, which is rumored to be named iRadio, is expected to be ad-supported and was widely expected to be available at the launch of the iPhone 5 last fall. A source for the Post said, "Everyone's had their initial meetings and everyone is preparing counters." Hopefully Apple will be able to iron out the details before the next iPhone is ready to roll.