The New York Post has broken the news that Apple’s planned streaming radio service, aimed directly at Pandora, wasn’t able to move forward due to Sony/ATV’s royalty demands.

Appleā€™s plan to have its own music-streaming service built into the iPhone 5 was dramatically dashed when talks between the tech giant and Sony/ATV hit a last-minute snag, The Post has learned.

At the same time, Sony/ATV is about to set the musicstreaming sector on its ear as it will pull out of the two main copyright associations, Ascap and BMI, in January, executives close to the matter said.

While Cnet points out:

If the publishers aren’t careful, Apple’s leaders could just decide to pay the statutory rate, the same fees that Pandora pays, if they can’t close a deal with rights holders. Those rates don’t leave much room for profit, but Apple could try to wait the publishers out.

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