According to CNET, “Apple is working hard to convince the major record companies to buy into its plan for a Web radio service, but some at the labels don’t like what they’re hearing.”
And just what are they hearing? Again, from CNET: “Apple has offered to pay a lower royalty rate than Pandora pays, even though it wants to provide iTunes users with the ability to do more with the music than Pandora’s customers enjoy.”
Apparently the issue centers on a percentage of the ad sales generated by the service which would be part of the comp package to the labels. One set of music-industry insiders wants to see that percentage higher; others, however, feel that it would be a good idea—and ultimately more profit for the industry—if Pandora has some competition.