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Apple has fallen behind Google in launching a music streaming service: Google’s Play Music All Access service is already live and costs users $10 per month. But why did Google beat Apple? The Verge decided to find out.

As we previously reported, Apple’s offer didn’t receive a positive response from music publishers. In fact, according to available sources, the largest publisher, Sony/ATV, has rejected Apple’s terms. Furthermore, Warner joined Sony and is still awaiting a better offer from Apple. So far the latter has raised its offer to 12.5 cents per 100 tracks streamed.

The Verge has learned that even BMG Rights Management, the fourth largest music publisher, shares Sony’s and Warner’s position.

Universal Music wants to see the iRadio launch as soon as possible. So what is holding these music publishers back, and why did they reach an agreement with Google?

The catch is in the subscriptions service model that Google and Apple chose to adapt. Google opted for a well-established business scenario?a Spotify-like service? So the terms could be determined smoothly.

Apple, however, chose to pioneer a hybrid web and radio service, which means the licensing terms need to be created from scratch. And when you mention Pandora to music publishers, their answer is a categorical “no.” Not that Apple wants to create another Pandora. According to The Verge’s information, it resembles Pandora.

“It’s very important that new digital services pay songwriters and music publishers a fair share of the money,” said David Israelite, president of the National Music Publishers Association, which is not involved in the negotiations but has been vocal about what he believes are the inequities in compensation between the labels and publishers. “We can not repeat the disaster that was Pandora where songwriters were asked to take a tiny fraction of the revenue.”

But in the end, Apple’s and Google’s approach to music publishers brings benefits to both parties and they are aware of that. The question of “how much” will be answered very soon.

Apple’s iRadio Subscription Model Holding Back Major Labels is a post from: iPhone in Canada Blog – Canada's #1 iPhone Resource

Google went and pre-empted Apple’s long-rumored iRadio streaming music service with a subscription music service of its own at this week’s Google I/O developer conference. Apple’s own developer event, WWDC, starts June 10, but the word is that its music service may not be ready to go by then.

The Verge says Apple is still “bogged down in licensing talks” with music publishers. Two of the big ones are still holding out, Sony/ATV and BMG, according to the Verge’s sources. That’s partly because what Apple is trying to do is not the same as Google Play Music All Access. Google’s service is a standard subscription service, like Spotify, and it will cost users $10 per month. It’s also not clear what the music catalog will look like for that service because Google has not yet announced which publishers have signed up.

iRadio is reportedly more complicated because of what Apple is trying to build and how it likes to do business. iRadio won’t be a straight-up web radio service; there will also be some on-demand aspects to it. And Apple also isn’t willing to pay music publishers an advance for access to their catalogs. Instead, Apple has agreed to give them a share of ad revenue, per-play fees and a guaranteed minimum payment, according to the Verge.

Apple already makes billions from its current content service, iTunes. It’s not essential that Apple have its own streaming music subscription service as answer to Google in a few weeks. But the company does need to acknowledge that times and habits have changed when it comes to music ownership. The developers conference seems a perfect place to debut it, but a fall event later this year when new hardware is set to be announced would be fine too; three more months doesn’t make that big of a difference at this point.

Related research and analysis from GigaOM Pro:
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• Analyzing the wearable computing market
• Monetizing music in the post-scarcity age
• Forecast: the future of the digital music industry

An interesting feature by The Atlantic regarding Paul Otellini, who officially stepped down as Intel CEO yesterday with Brian Krzahnich taking his place, reveals the former CEO’s regrets of not being able to get the Intel CPU inside the original iPhone. Otellini explained in an interview that he should have followed his gut instinct and “not relied so strictly on cold hard data”.

Paul Otellini stayed at Intel for almost 40 years. He’s been CEO of the company for the last eight years. According to the source, Intel generated more revenue during his eight-year tenure as CEO than it did during the rest of the company’s 45-year history. However, during his interview with The Atlantic, Otellini expressed regret for not having the foresight to get Intel’s chips into the original iPhone. In fact, it was the only moment the interviewer says he heard regret slip into Otellini’s voice.

“We ended up not winning it or passing on it, depending on how you want to view it. And the world would have been a lot different if we’d done it,” Otellini told me in a two-hour conversation during his last month at Intel. “The thing you have to remember is that this was before the iPhone was introduced and no one knew what the iPhone would do… At the end of the day, there was a chip that they were interested in that they wanted to pay a certain price for and not a nickel more and that price was below our forecasted cost. I couldn’t see it. It wasn’t one of these things you can make up on volume. And in hindsight, the forecasted cost was wrong and the volume was 100x what anyone thought.”

Steve Jobs in his biography said there were two reasons why Apple didn’t ask Intel to manufacture chips for the iPad and the iPhone:

“There were two reason we didn’t go with them. One was that they are just really slow. They’re like a steamship, not very flexible. We’re used to going pretty fast. Second is that we just didn’t want to teach them everything , which they could go and sell to our competitors”.

Intel CEO Steps Down With Regrets Of Not Getting Its CPU Inside The iPhone is a post from: iPhone in Canada Blog – Canada's #1 iPhone Resource

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