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Apple Inc. (AAPL) Playing Sweet Music with Warner; What About Sony?

Apple Inc. (NASDAQ:AAPL) has been rumored to be working on a music-streaming service that would be similar to Pandora Media Inc. (NYSE:P) or Spotify, and it has been rumored for quite a few months now. And usually what happens when something is beyond your control, it doesn’t always work the way you hope or expect, and delays and obstacles can affect things. And with Apple’s Worldwide Developer Conference just a week away, Cupertino can at least have one more announcement having to do with software and services that can lead into a positive direction, but there is still one very big obstacle yet to overcome.

Apple Inc. (AAPL) to be Added to Several WisdomTree ETFsApple Inc. (NASDAQ:AAPL) can say it is one big step closer to having its “iRadio” service to compete with other music-streaming services, now that it is reported that Apple has reached a licensing deal with Warner Music Group for both publishing and recorded music rights. This puts Apple close to matching Google Inc (NASDAQ:GOOG) which last month launched its Google Play All Access music service at its annual I/O conference.  The one obstacle keeping Apple out of the segment is Sony, which has rejected at least two prior Apple offers, and word is those two companies are still far part in reaching any kind of deal. That means the chances of announcing the”iRadio” service at WWDC next week seems about the same as a snowstorm in Phoenix.

However, the Apple Inc. (NASDAQ:AAPL) deal with Warner could be a model for a potential deal with Sony, as the Warner contract seems to be one of the most lucrative for the distributor among the various streaming services. While not all details have been revealed, word is that Apple will pay Warner Music about 16 cents per 100 plays of a single song, plus tack on additional ad revenue that is only named as “more than twice” the amount  offered by Pandora Media Inc. (NYSE:P), which is believed to be a 4-percent cut.

Apple Inc. (NASDAQ:AAPL) already has a licensing deal with Universal Music Group, but that does not include publishing rights, only recorded music. However, that may seem to be enough for Apple to get the service off the ground, with surely a possibility for an expanded contract in the future. That may especially be true if Apple can reach a deal with Sony that is similar to the Warner pact and thus give Apple some leverage with Universal.

What are your thoughts about this deal? Do you think this will help Apple Inc. (NASDAQ:AAPL) close the sale with Sony and get “iRadio” launched by the end of 2013? Give us your feedback in the comments section below.


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