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Be afraid, Pandora, be very afraid.

Cupertino’s computer company-turned-multimedia juggernaut Apple is looking to launch their Internet radio service in early 2013. Execs from VIvendi Universal, Sony and Warner have all been to Apple HQ in recent weeks to learn more about the service. Apparently the labels are looking for a percentage of ad sales, in addition to an upfront fee. Via Bloomberg:

With sales of music downloads slowing, Apple and record companies are seeking new ways for customers to discover and buy digital music. To challenge Pandora, Apple is seeking licensing pacts with labels that allow more flexibility about what listeners hear. Pandora relies on a compulsory license that limits how often users can skip tracks and how many times an hour an artist can be played. Apple is also seeking earlier access to new releases.

The impending launch of Apple Radio has been playing havoc with Pandora’s stock prices.

Pandora, based in Oakland, California, fell as much as 21 percent, the most since March, after Bloomberg News reported Appleā€™s progress on talks with the labels. The shares were down 12 percent to $8.20 at 3:55 p.m. in New York.



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