Talks are centered in part around how to share ad revenue and a deal could be reached by mid-November, with Apple starting a service within the first three months of 2013, said the people, who asked not to be named because discussions are still in progress. Shares of Internet-radio leader Pandora Media plunged.
Apple is looking for licensing agreements that are more flexible with what listeners can hear. Pandora's agreement limits how often users can skip tracks and how many times an artist can be played. Apple reportedly wants to ease these restrictions and get access to newer releases.