Apple's dreams of launching a streaming music service similar to Pandora have apparently hit a snag when it comes to royalties to be paid to Sony/ATV.

Earlier this month it was reported that Apple was working on a "Pandora-killer" that would launch in the coming months. Apparently a last minute snag kept the service from becoming part of the iPhone 5 services, and it's all over tenths of a penny.

According to a report from the New York Post, Sony/ATV – the largest music publisher in the world – and Apple couldn't come to an agreement over the royalty to be paid per stream. The cost of this is usually just a fraction of a cent, but Apple was looking for a rate lower than services like Pandora pays as it would be tightly integrated with the iTunes Store and would theoretically drive more sales. With the largest collection of song copyrights in the world, Sony wields a lot of power in these matters, and the company has passed on the offer. For now the Apple streaming service is on hold.

The entire streaming music landscape could change next year as Sony/ATV is set to exit ASCAP and BMI, the music organizations that allows companies such as Spotify to negotiate with one entity for licensing. Now the services will have to negotiate with the groups for everyone but Sony, and then have to enter into one-on-one talks with the Japanese company.

It would seem that the recent purchase of the EMI catalog by Sony has definitely shifted the power in the world of music.

[via the New York Post]