“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
“Socialism has failed before, it will fail with the Zune.”
This isn’t socialism, its just stupid greed on the part of Universal.
how many video recorder companies paid TV companies a fee. Did Sony pay record companies a royalty for the Walkman – I think not.
So if Apple doesn’t comply, what will UMG do, pull out of the iTunes Store? Like that makes a lot of sense? No. Apple knows the music labels need them more than they need the music labels. Maybe Apple should start asking UMG for $1 for every iPod sold!
iPod users call Universal Music Group a bunch of greedy, stupid fucks.
I actually buy far more music now than I did before iTunes came about. Most of it I don’t buy thru iTunes, I buy the actual CD’s, but the slickness of iTunes as a venue for browsing new music and other media has really grabbed my attention. It’s not just iTunes, it’s the entire spectrum of digital media now that makes it so addicting, fun, and easy. The music I have bought from iTunes, I just click — there it is, bought. No real thought. Shameful to say in that sense I am an impulse buyer. Same goes for software. It’s so easy to buy it online now, quickly. Before ubiquitous digital media downloads, you had to drive to the store, pick it out, carry it around, etc… lots of time to think about it and then put it back on the shelf without buying.
The music studios should be kissing Steve Jobs’ feet to keep him as a partner. If they don’t, he will soon have the power to completely put them out of business, and I, for one, after watching their behavior, hope he does just that.
This is ridiculous. Waaaay back when the Sony Walkman came out–and even before that, when my folks got our first tape player–people (including me, a broke middle school student) were taping each others’ record collections and even taping songs off the radio (now THAT was an exercise in patience and a quick finger on the record button!).
In other words, this problem has persisted for a very long time, and will persist forever. It’s just the nature of music/media and the way consumers work.
The deal for us, as we grow older and hopefully wealthier, is to purchase what we listen to so that we support the artists making the music we love… On the other hand, I have absolutely no desire to pay off the slimes who run the large record labels. If Apple or anyone else could figure out a way to cut these folks out of the loop, I would jump at the chance to follow that path.
What’s really ironic here is that music sales have consistently gone up since the introduction of the iPod. I listen to far more music now than I ever did before I bought my first iPod. 20+ years of CDs and lots of music I’ve purchased in the last couple of years, and I can listen to any of it on a whim at any time. Record labels should be thanking their lucky stars for the MP3 player!
Personally, I would rather be a thief than a moron anyday!!!
I have an iPod.
I buy albums on CD, I then rip those CD’s into my itunes library at an above download quality rate and put the CD’s away, rarely to be directly listened to again.
I buy occasional single songs from iTunes. In the case of new songs it’s stuff I want to try before committing to an album – if I do then buy the CD I’m buying the song twice. In the case of older stuff it’s the classic song by an artist whom I don’t need an entire album by since I only want that song.
How exactly am I a thief?
“”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.””
So if you buy a player that pays a royalty to these record co’s then does that mean you can then go online and take any of their music for no addional cost then?
I mean, if what he is saying is true, thats what it sounds like.
Scumbag!
Boycott that shit major label!
In related news:
“Microsoft today was overwhelmed with the world-wide success of its Zune program as it has signed up 500 record company deals around the world. A spokesman said the company was excited about the large number of songs for sale on its store, but was unsure what it would do now it was now losing $250 net per Zune on each sale due to the $1 commitment to each record company. Steve Ballmer was throwing too many chairs to comment.”
Perhaps iPod users should start boycotting the artists and let the artists put the heat on UMG.
http://new.umusic.com/artists.aspx
There ya go. A list of all their artists including…
Ashlee Simpson
Audioslave
Beck
Black Eyed Peas
Blink 182
Eminem
Gwen Stefani
Nine Inch Nails
Snow Patrol
Sting
Toby Keith (probably should boycott him anyway)
U2
Thanks for the editorial assist, MDN. Much appreciated
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3rd Generation iPod (20 GB):
1% music from iTunes Store
99% ripped from own CDs
= 100% legal
GWM – I’d be close to that
I have 200+ albums (real vinyl) which I paid about $14 EACH
And I have something like 1500 CD’s
I’ve bought these over the last 30 years
Hmm.. I wonder if it’s feasible to sue for libel as a class action?
Oh, well. If someone could make up a list of Universal Music acts that I can refer to before I buy a CD or a song on the iTMS, it would be much appreciated. I’d rather not give my money to a company whose CEO has slandered me.
-jcr
If you feel offended, tell universal that you are:
communications@umusic.com
At least that’s what I did. I told them that I didn’t steal my CDs, it was cold hard cash, the only thing they love…
What prevents Zune users from pirating music and will Zune users embrace this restriction?
>Their ex-CEO Jean-Marie Messier is in jail in France for stock fraud.
No he is not. Unfortunately.
The way I see it, this is just a reason for people to steal more music. With this tax you’ve already paid for the music, so go ahead and download it as the record companies have already been paid. If they try and force you to pay for the music again, well thats just double-dipping. But we already know the labels are greedy.
Universal is just a shadow of their once former greatness. Under management of the French the company stinks as bad as their B.O.
My email to Univeersal:
“As an iPod owner, and according to Doug Morris, therefor a thief, I plan to boycott Universal/Vivendi products and artists for the foreseeable future. I can live without you. Can you live without me?”
Microsoft’s management is not too bright if they would bow down to the record labels and agree to this absurdity. Microsoft should have signed up everyone else with more favorable terms for distributing their music. What gets me is that Microsoft has even said that this device is supposed to be more than a music player, so why are they agreeing to pay these idiots? So, when they start selling movies and games, are they going to just give away all their profit to pay each person who sells content through their marketplace? Microsoft is truly idiotic for setting this precedence. All that’s going to happen now is in order for Microsoft to make any money, they’re going to have to raise the price to cover all this profit sharing.
If I were a MSFT stockholder, I’d sell it in a heartbeat. This is the kind of stupidity that incompetent management shows right before the company starts heading out of business.
Oh, and I have 90 GB of legal music on my home server (and still have a closet full of CDs to rip) and paid a pretty penny for all of it. I refuse to pay those extortionists twice for anything. I don’t do stolen music. No wonder people lose interest in music – these companies are transparently greedy and treat their customers like criminals. I do wish that these middlemen will become obsolete.
Yeah. about the same count here, Toolazy. A couple of hundred fewer CDs for me, however. My wife makes up for that with an additional two thousand CDs of her own, though.
We’re part the small handful that did spend that much over a lifetime. Regardless, that’s why I’m aware of the circumstance, as you no doubt are too. It becomes pretty clear, as well, that nobody really much discusses their total cash outlay anymore. Not like they used to, at least. It’s way too rude of a topic to casually embark on in today’s society. And that’s perhaps the one part of the whole circumstance that’s most telling, imho.