Universal Music Group has agreed to license its songs to Apple Inc.'s proposed iRadio streaming service, according to the Financial Times.
With the largest record company in the bag, the Cupertino, California, hardware company now only needs Sony Corp. and Warner Music Group on board in order to launch its Internet radio service.
Apple's efforts to round up the three major record companies have been complicated by the label's current battle against Pandora Media in Washington, where the Recording Industry Association of America has been lobbying lawmakers to retain the current method for setting royalty rates paid by Internet radio services, which roughly amounts to 0.125 cents per stream.
Apple had been seeking a far lower royalty rate of 0.08 cents per stream, but with a chance to get cut of the advertising revenue Apple would generate from the radio service. Pandora does not split its ad dollars with record companies. Accepting Apple's terms would have put the labels in an awkward position of having to explain to Congress why that was acceptable for Apple, but not for other Internet radio services.
The arrangement Apple struck with Universal, which the Financial Times reported as being the same 0.125-cent rate as Pandora, helps the labels avoid that scenario.
At press time, Universal had not responded to Billboard.biz's request for comment; a rep for Apple had no comment.
Apple is racing against Google and, potentially Amazon, to offer music streaming on their respective platforms in their efforts to provide consumers with a comprehensive digital media hub. Microsoft Corp., which is set to unveil its next-generation Xbox console, already has a music service that features on-demand streaming, radio and downloads on its Xbox 360 console as well as Windows 8 devices.