This story sounds on the surface to be absurd and petty, but consider the following: When you sell your music on itunes, Apple takes about 30-40% of every dollar of revenue. Apple is charging you, say, 30 cents for a dollar of music for the service of downloading it.
If it can be proved that the feature of having live streaming of 30 second clips contributes to the business, then why shouldn't the artists get paid some fractional amount for that? Apple is using intellectual property that does not belong to them as part of their profit model. This is something that is in the contract one signs with itunes, and that is fine. However, it is also something that is negotiable when one considers the value of an artist's intellectual property to iTunes. If artists or the music "industry" believe that the business model should be different, well they have the right to do that. Apple created this business model so naturally it favors them, but in a free market the labor side (in this case songwriters or the music biz) have ever right to negotiate the terms.
It's a struggle between the power of the person making the song and the person selling the song. In this case Apple has all the power, but this argument is by no means absurd. It's like saying that employees of a company have no right to stand up for their own worth and renegotiate their pay based on their contribution to the company.
Some other thoughts:
I am amazed at the vitriol directed towards songwriters here who want to get paid for other people using their music to make money.
People complain with such scorn and contempt about the greed of artists because they see art as not having monetary value and the artist as selfish and inhuman for wanting to get paid.
But who is the selfish one? Perhaps it is the person who takes what the artist produces and condemns them when they seek compensation.
The music industry is horrible, it screws the artist, that is beyond true. But this is not about that. People tend to rag on the "greed" of artists for trying to make a living. If you look at the VAST majority of people who sell on itunes, they are not getting rich.
As much as people find it reprehensible that artists want their fair shake, if you don't pay them then they stop making music, and our lives are the poorer for it.
Writing, recording, and distributing music costs a lot of time and money. You don't hear songwriters, who are usually the kind of people who don't care about money (versus a giant media conglomorate) bitching about getting rich, you hear them bitching about getting paid for their work.
Artists traditionally are not organized and have no collective bargaining power. They are always getting screwed. If you want to look at the greedy party in this situation I say it is apple. The notion that a company like apple is being "picked on" by songwriters is patently absurd.