Why Google Was Able to Beat Apple to a Music Streaming Service
Earlier this week, Google launched a new 'All Access' music subscription service while Apple is still said to be in negotiations with music labels for iRadio. A new report from the Verge offers some insight as to why Apple is having a harder time with licensing agreements for its service.
A major difference between the two is that Google chose to offer a service similar to Spotify and Rdio. Thus, terms for the service type had largely been established. Apple on the other hand is looking to create a hybrid web and radio service more similar to Pandora but with some on-demand features.
"Of course [Apple's] negotiations were going to take longer," said one source.
Additionally, Google was willing to pay advances to some of the major copyright owners; however, Apple traditionally is unwilling to do that and at least initially didn't offer any advances. The company has agreed to pay content owners a share of the ad revenue, a per-play fee, and a minimum guarantee.
The report notes that Spotify-like subscription services are more lucrative for labels than radio services such as Pandora; stating, that if iRadio was a clone of Pandora it would never get licensed.
While Apple has differentiated itself from Pandora, Sony/ATV, the largest music publisher, has reportedly rejected Apple's terms and The Verge has learned that BMG Rights Management is also holding out. That being said, some of the industry's largest players are apparently excited about the service and would like to see it launch as soon as possible.