Universal Music Group CEO calls iPod users thieves

“Microsoft [has] agreed to share revenue from Zune sales with record labels and artists. Forcing the issue was Universal Music Group, which at deadline is the only label named in the program. UMG refused to license its music to the Zune unless it could receive a percentage of each device sold, in addition to standard music licensing fees for downloads and subscriptions,” Jonathan Cohen and Brian Garrity report for Billboard.

“These devices are just repositories for stolen music, and they all know it,” UMG chairman/CEO Doug Morris says. “So it’s time to get paid for it.”

Cohen and Garrity report, “Microsoft is working with all major and independent labels to establish similar revenue-sharing agreements. According to published reports, UMG is expected to receive more than $1 for each $250 device and sources at UMG have confirmed that half of all the proceeds from the device’s sales will be shared equally among all its artists.”

Full article here.

[Thanks to MacDailyNews Reader “Michael Y” for the heads up.]
As there are no Zunes out there, it’s obvious that Universal Music CEO Doug Morris has basically just called iPod users thieves while accusing Apple of aiding and abetting thieves the world over by making 70+ million iPods that each come with “Don’t Steal Music” stickers. Morris has just joined a unique group of iPod thievery accusers that includes Microsoft CEO Steve Ballmer and Real CEO Rob Glaser. Good luck snagging a doughnut at that group’s weekly propaganda planning meeting, Mr. Morris.

JupiterResearch on September 14, 2006 released a report,” Portable Media Player Owners – Understanding iPod Owners’ Music-Buying Habits..” The report’s author, JupiterResearch analyst Mark Mulligan, has blogged (see: Straightening the Record) the following regarding the report:

So this report got a lot of attention in the media, which shows how much interest there is in the topic. However some of the coverage has been quite selective in which parts it has highlighted and some have even used it as evidence for Apple-bashing. So for the record here are the key thrusts of the report (all of the below refer to Europe): MP3 player owners of all types (iPods included) don’t regularly buy much digital music. iPod owners are actually more likely to buy digital music than other MP3 player owners. Free online music consumption significantly outweighs paid, significantly more so for owners of non-iPod MP3 players. Device owners are much more likely to buy CD albums online than digital albums.

The facts: Most tracks on a typical iPod are not tracks that were purchased online. Most tracks on a typical iPod come from CDs that users have legally purchased and already own and ripped via iTunes. Tthe truth is that iPod owners are significantly less likely to steal music than also-ran MP3 player owners. iPod owners are “substantially less likely to download using filesharing software with only 7% of iPod people downloading illegally compared to 25% on average. And they’re more likely to be buying CDs, with your everyday iPodder buying 2.3 albums a month compared to the average of 1.8,” XTN Data reported in a January 2006 report. XTN Data surveyed over 1,000 UK and US music buyers to arrive at the data. XTN Data also found that 50% of iPod owners regularly download music from Apple iTunes Music Store.

Microsoft was either stupid, desperate, and/or sleazy by signing that awful deal with Universal. Imagine someone buys a Zune (farfetched, we know, but play along), but they never listen to a second of Universal-controlled music. Guess what, under Microsoft’s idiotic deal, Universal still gets paid for absolutely nothing; they just take the money anyway… kinda like stealing, huh? Who’re the real thieves here? The music labels do not deserve a cut of MP3 player revenues any more than television networks deserve a cut of TV sales. It’s stupid, illogical, and wrong. Microsoft’s real tag line for their Zune debacle should be: “Welcome to socialism.”

It’s time for Apple to start eliminating the middlemen.

Universal Music Group contact info:

email: communications@umusic.com

2200 Colorado Avenue
Santa Monica, CA 90404
(310) 865-5000

1755 Broadway
New York, NY 10019
(212) 841-8000

Related articles:
Did Microsoft have no choice, but to sign bad Zune royalty deal with Universal? – November 11, 2006
Following Zune deal, Universal expected to demand iPod royalties from Apple [UPDATED] – November 10, 2006
Microsoft attempts to poison Apple’s licensing deals with music labels – November 09, 2006
Microsoft to pay Universal for every Zune sold – November 09, 2006
Study shows iPod owners significantly less likely to steal music than the average person – January 13, 2006
Warner’s Middlebronfman: ‘We sell our songs through iPods, but we don’t have share of iPod revenue’ – October 05, 2005
Warner CEO Bronfman: Apple iTunes Music Store’s 99-cent-per-song model unfair – September 23, 2005
Real CEO Glaser calls Apple iPod owners thieves – May 11, 2006
Microsoft CEO Ballmer: ‘Apple iPod users are music thieves’ – October 04, 2004


  1. I think Steve Job should tell Universal, fine Apple will pay the royality on every iPod sold, starting next year. By the way, we will stop paying iTune sales royality, since that will be double dipping on same songs.

  2. The music labels do not deserve a cut of MP3 player revenues any more than television networks deserve a cut of TV sales. It’s stupid, illogical, and wrong. Zune’s real tag line should be: “Welcome to socialism.”

    Something like this on a economic scale is exactly what the Socialist Democratic Party is all about.

    People who play by the rules; they buy their music, cars, clothes and other needs from their hard work and efforts have to pay a tax for those who refuse to.

    I refuse to buy a Zune, Apple provides the devices, it’s people’s actions, and the high cost of cd’s and record label greed that motivate people to steal.

    Socialism has failed before, it will fail with the Zune.

  3. Why do that when we can steal the songs like they are accusing us of anyway? It takes a real idiot to push an idiot’s ideas.

    “Why not pay a Dollar to all music companies?”

    How much of an investment did the music comopanies stick into research and development of the players? Or why only give half of the dollar to the starving musicians when they could really be honest and give it all to them? The musicians are the creators not the executives. This article sound like someone (music execs) else is standing on the platform while the train left days ago.

  4. I agree with MDN’s take.

    I have over 9000 songs in my iTunes library. I have purchased maybe ~ 150 songs total from the iTunes Store. The iTunes / iPod combination has provided me (and I’m sure many others as well) a new way to listen to my music. I began ripping my CD’s into iTunes in Sept. 2001 when I bought my first Mac. I didn’t buy an iPod until almost 2 years later! Even before the iPod, I had forgotten about some of the CD’s that I already owned. Once I had the capacity I needed, I began ripping the entire collection. The iTunes / iPod experience has definitely changed the way I listen to my music! And to this day, I have NEVER downloaded any song from the Napster / Limewire (or equivalent) sites. I just haven’t wanted to or needed to. If I hear a song that I like, I buy it from the iTS.

    The record companies are crying “sour grapes.”

  5. All other considerations aside, which of us personally knows more than a handful of people who have actually spent twenty or thirty thousand dollars on their record collections? That said, which of us does indeed personally know a substantial number of people with double digit gigabytes of music on their hard drives?

    Just saying. I think we ought to at least be honest when we discuss this issue.

  6. Ever since they started making blank recording tape, people been recording music, theirs or someone elses. Nothing new here.

    I remember one recording label big wig talking on TV about people stealing music. “When people play these [blank tapes] all they get is hiss, they’re putting something on them.”

    Kinda chuckled, because all I bought them for was to record music that I already owned, so that I could play it in my car. To buy music on tapes was just a crap sounding medium anyway, so I had to re-record them onto tape to get a better sound than what the record labels provided, no matter how they tried.

    So some of us are truly stealing music, but that is unlikely to change in the near future. They’ll figure something out and we probably won’t like it.


  7. MDN this is a stupid interpretation on your part, yet again, but that’s why I keep coming back.

    He clearly is referring to the MP3 player in general and, as you like to ignore, Ipod makes up barely 50% of the WORLDWIDE market.

    What an inferiority complex MDN has, grow up. There’s another @45-50% matket of OTHER PMP’s.

  8. With this brain dead logic, why stop at iPods and MP3 players? If music players are a repository for stolen music then so are computers. So why not have Dell, HP, SONY, Apple and all the others start paying the music companies a royalty for every computer sold?

    This, I’m sure, makes sense in the empty head of a music executive.

  9. They need to charge automakers, too. And all music hardware makers. And all people with ears for having the audacity to hear their music should it be played out loud. Furthermore, God should pay them because his laws of physics allow the stealing of music by people with ears because he allows sound waves to travel. Oh, and…

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