Low royalty offers leading Apple’s struggles in negotiating streaming music service (update: Delayed until summer?)

While it appears that Apple has been actively working on a streaming music service to take on services like Pandora and Spotify, Apple is reportedly still in continuous struggles in terms of getting the music record labels on board. According to the New York PostApple has having trouble getting labels to agree to its royalty offers for each song streamed. Reportedly, Apple is offering 6 cents to labels per 100 songs streamed, which is about half of what the competing Pandora pays:

The tech titan, the most valuable company in the world, made an initial offer to the label of about 6 cents per 100 songs streamed, sources said.

That’s about half of the 12 cents per 100 songs paid by Pandora, the leading online radio service that Apple is taking aim at, sources said.

“Apple wants a rate that is lower than Pandora’s,” said one high-level executive.

With Apple currently sitting on a massive amount of cash, music company executives reportedly feel that Apple should be offering higher royalty rates.

The report also claims that Apple had hoped to launch the service in tandem with the iPhone 5, which launched in September of last year. Apple reportedly wants to integrate its radio-like service with iAds and perhaps bundle it with the $24.99 iTunes Match service. Apple is also looking to launch the radio service internationally.

Update: The New York Times has chimed in with similar claims. Their report adds that the service will not launch until summer at the earliest (if ever).

Update 2: Bloomberg is corroborating, saying much of the same. Also says Apple still wants service released by end of year.

Update 3: Pandora up 3% today:

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