Apple's plans for an Internet radio service have hit a snag over the licensing of music controlled by Sony/ATV, which recently became the world's biggest music publisher.
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The two companies are at odds over what rate Apple should pay to stream Sony/ATV songs on its service, a money standoff typical of such negotiations.
But what is new is that Apple needs to negotiate at all. Typically, streaming services have obtained publishing rights from the major performing rights organizations, ASCAP and BMI, which for decades have acted as clearinghouses on behalf of publishers and songwriters.
In recent years, some music companies have moved away from that model, figuring that the returns would be better if they handled licensing directly and opted out of the blanket rates set by those organizations.
When an investor group led by Sony bought EMI Music Publishing in June for $2.2 billion, Sony/ATV, a joint venture between Sony and the estate of Michael Jackson, took control of the world's largest music publishing catalog with 2 million songs, including most of the Beatles songs as well as current hits by Lady Gaga and Taylor Swift.
EMI already withdrew its digital rights from ASCAP, and Sony/ATV will follow suit with the rest of its catalog, effective Jan 1.
So just as Apple hopes to line up the licenses it needs to operate a streaming radio service, obtaining those licenses has suddenly become more complicated.
Martin N. Bandier, the chairman of Sony/ATV, said in an interview Friday that the disagreement with Apple was simply an effort to obtain a higher royalty rate for his songwriters.
"This wasn't us not wanting the service," Bandier said. "We want the service. It's like oxygen. We just want to be paid fairly, no different than the NFL refs."
Apple declined to comment. The news of the negotiating standoff was first reported by The New York Post.