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Sony-Apple Dispute Said to Crush Music Streaming Service in iPhone 5

N.Y. Post reports breakdown occurred over music royalty payments

A dispute with Sony got in the way of Apple’s plan to include music streaming on its recently-released iPhone 5.

That’s according to the New York Post, which reports that the two companies couldn’t agree on a per-song music royalty.

Usually the rate is pennies per song and Sony/ATV — an Apple rival in the consumer electronics market — wanted more, according to the account.

Perhaps the more significant angle is that Sony plans to pull its digital performance rights out of ASCAP and BMI in the new year, which in turn, will make it harder for Internet audio services like Pandora and Spotify to negotiate future rights deals for Sony music.

A consortium that Sony/ATV administers recently got the okay to acquire EMI Music Publishing, which would give Sony/ATV control of two million song copyrights.

The new Internet radio service from Apple is expected to rival services like Pandora and focus on virtual stations to play music on a Web browser or through dedicated applications on iOS devices. Ads from Apple’s iAd platform are expected to be incorporated into the service in exchange for free user access.

Apple declined comment on its proposed music streaming service and Sony/ATV could not be reached, according to the account.