“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
The pot calling the kettle black?
It is the labels that steal from the artists. iTunes at least allows for a proper accounting to ensure the artists get correctly compensated.
Copy of email sent to UMG:
Subject: You calling me a criminal?
So Doug Morris,
CEO & Chairman of UMG, I take considerable offense at the suggestion that I and all iPod owners are thieves and our iPods are filled with ‘stolen’ music.
Does my iTunes collection and iPod contain downloaded music which I haven’t paid for? Yes, of course it does. All those tracks which have been deleted by the labels and can’t legally be purchased anyway. All those house and trance tracks which were never released as singles, only on vinyl. And the odd favourite track here and there which I owned on a CD but was stolen. I download those and make no apologies for it. But that makes up less than 5% of my entire music collect. And that doesn’t mean that I’m not still looking to replace these unpaid downloaded tracks with purchased versions in either physical form or as digital downloads. Sometimes this means forking out $45 AUD for a multi-disc set just for one track – imagine that, spending $45 for a song I love – and if I’m lucky, there might be other tracks on the set I also like and grow to love. Does that sound like a criminal mind to you?
But the bulk of my music collection in iTunes and on my iPod has been ripped from my extensive CD collection, and a few iTunes and other legal downloads but no doubt you consider ripping ‘theft’ too. No doubt you want me to buy my music, twice and thrice to satisfy your perverted lust for money. You and your ilk should be careful who you go about calling a thief – to me it’s the ones with obscene incomes and mountains of wealth who are the real thieves: Pot, kettle, black. What a hide!
So Doug Morris, CEO & Chairman of UMG you can stick your arrogance up your arse. And just to spite you, I might avoid purchases from your company altogether.
I don’t take kindly to being called a criminal.
Stuart Duel
Music Lover – Capitalism hater
I only buy used CDs never new that way record companies get nada from me.
“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.”
Dear Mr. Morris:
Read your statement above please… I am absolutely appalled at your juvenile-like statement, and I am quite offended that you think all iPod owners are thieves. You need a little reality check from me, the buying consumer.
Recently, I purchased two iPod nanos (red) for myself and my wife – our first iPods. We own over 600+ audio CDs that we paid for with our own hard-earned cash. I purchase CDs from all over the world, mostly on Amazon, due to my extensive musical tastes. I am in the process of digitizing all of our audio CDs so I don’t have to touch them ever again – they will be boxed up to protect them and put in my closet.
For your information, we don’t steal music and we do not order music online at the Apple iTunes store either. Your statement is very offensive and it is a blanket statement that is undeserving in my opinion. Personally, I do not like all the “bubble gum” crap music that you music labels release these days, and because of this, I am quite selective in what I purchase on audio CD. Quite possibly that is the reason for declining music sales, because most of the music released today is complete garbage.
As of this moment, my wife and I are boycotting the Universal Music Group along with any related businesses. We will not purchase any of your products ever again, because we both live by principles in life. Since I absolutely detest being accused of something I have never done, you have lost both of us as customers for accusing us of being common criminals. I am an honest man and have always been that way – you offend me greatly.
“So it’s time to get paid for it.” Paid for what may I ask? We already pay you indirectly when purchasing one of your products. Isn’t that kind of like double dipping? You already rip off your own artists by being the expensive middlemen that add such a ridiculous surcharge to the price of audio CDs. Why do you need more money? Is it for you to double dip from the company’s funds, so you can take a prostitute out for dinner, etc.? We can also make blanket statements about CEOs that we have never met.
To sum up… You are an asshole and your board of directors should fire your sorry ass.
Yours sincerely,
James *****
My first though was that this clown is one of those fools that thinks only downloaded music goes on iPods (these are similar to the fools that believe music with DRM = piracy and trying to starve artists). Then I realized that the music industry wants it to become accepted that ripping CDs is stealing. Their wet dream tactic, DRM on CDs, has been nothing short of a disaster. They realize that downloads with DRM are still too small a fraction of total music sales, so they want to send the message that ripping CDs is stealing. I believe, as the current laws are written, it may or may not be fair use. Their goal, of course, is to make you buy a copy for every device. They had such a windfall with the advent of CDs, as people bought their catalogs again, that they want to recreate that scenario. If they cannot do that, they want part of the hardware action.
I’m all for artists getting paid, but I am also for the reasonable fair uses the consumers have had over the years be retained in this format (digital files on some form of memory).
“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.”
12,500 tracks on my iPod. 95% of it from CDs that I bought. Some from iTS. Some from CDs friends burned for me. I haven’t purchased my own copy of many of those burned CDs, but I have purchased other CDs from each of the represented artists and in many cases paid for tix to their shows. Of the 10 people I know with 100+ GB of music, I would say they are in approximately the same 95% paid for range.
BTW, my 1000+ casette tapes that have been in storage for 10 years – paid for a much lower percentage of those. The labels more than made back their money on that when I bought the CDs of the albums to which I actually listened. Does anyone know if the labels got $ from the sale of blank tapes or casette recorders?
Of course, we all know that there are folks that were in HS or college around the advent of the Napster 1.0 era that have endless gigs of music they didn’t pay for. Many people were in intentional denial during that period and some probably haven’t recovered. However, condemning iPod owners for being thieves is not really a way to solve that problem. In fact, from comments I have read above, it merely pisses off people that have been attempting to be righteous about their music acquisition habits.
I am all for educating people that pirating music is bad for artists, but when you trying to equate ripping CDs with piracy and thievery, you lose credibility with the audience and hinder the cause. I also do not feel like compensating the label for damages that I have not caused.
Way to go Stuart.
My email was shorter, but just as pointed.
Everyone else join in now.
If Universal (and all the other music labels) want a “music royalty fee” attached to every device (mp3 players, computers, harddrives, etc., etc.) capable of storing and/or playing music, then I have a (half serious) proposal.
Let’s enact legislation to do that, and to top it off, let’s beat MS at their own game, by paying an additional fee (variable…say up to $5 per each label) on every device. Fees would be collected and splt equally between all the major labels and their artists.
What’s in this for music consumers? Well, the trade-off/concession is this… all the labels music becomes freely downloadable. From wherever.
We, the music consumers, don’t pay for music again. (Except at concerts, or it comes on a non-DRM’d CD/media, or is purchased directly from an indie label/band.) Otherwise, we’re paying for music at least twice, and those that don’t listen to music are also paying for it.
And another thing… there’s already an government agency that can handle this.
The IRS.
They can track/collect “royalty fees” from manufacturers, and assess/collect the appropriate taxes before dispersing the remainder directly to the appropriate parties.
Yes, this is very simplistic, but (as I said) I’m only half serious and I’m only trying to get across the essential points.
As they say, the devil is in the details.
I hope he likes my e-mail above, because I Cc’ed it to Steve Jobs as well. I want Apple to know how I feel about music companies accusing me of stealing music, when I have not ever done such a thing.
If there is one thing I cannot stand in this world, it is to be accused of something I have never done. Grrr…
The only times I’ve downloaded tracks through Aquisition or Limewire is either
A: I have the CD in a cupboard but I suddenly thought of a track I wanted to hear without hunting down my CD or
B: I hear a song I like from an artist I’ve never bought before, I download a couple of tracks, listen to them and either delete them if I don’t like them or go out and buy their CD if I do. From there onwards, they are a chosen artist for me and I’ll actively look for their new CD when it comes out.
Music label execs are just middleman leeches who profit off of the real talent and work of others. It’s time they shut the fuck up.
1058 music tracks. 565 tracks bought from iTunes. The rest were free tracks offered by the artists’ labels or the (self-produced) artists. (I’ve never bought a CD in my life.)
My email I just sent:
Re this quote by your CEO, Doug Morris:
“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.”
Here are the FACTS, Doug:
I’ve got 9,213 songs on my iPod. I have PAID for EVERY song!
MANY of those songs are from Universal’s catalog. Hmmm, maybe I’ll just stop buying your music from now on since you think that calling your customer thieves is OK.
Mr. Morris owes me and millions of his customer an apology. Oh, and while he’s at it, since he obviously doesn’t have a clue what goes in the real world, he should resign!
I’ll await that personal apology from Mr. Morris!
They want $$ per MP3 player sale and they want everyone to pay a monthly subscription for their music as well. They keep pushing back copyright times to collect money on tunes forever.
They think switching to digital recordings was a big mistake.
Don’t get them started on the internal combustion engine or heavier than air flying machines.
“””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.”
I like this idea, I say we give all the record companies 1 dollar for every ipod and also ran, then we can all go to limewire and get what we want for free, because we have already paid “a liscensing fee”
I say, Go Morris Go!
MDN word Theory
as in this is a good one
I’d like to share the email I just sent to UMG (feel free to copy what you;d like)
My iPod is filled with THOUSANDS of songs, many not born from any of the majors, but now controlled by them (U!)…
All purchased legally from iTunes, or in CD/vinyl format.
I just wanted to let you know that within the next 48 hours all of my music that Universal now controls -since we all know you haven’t really developed that much on your own, have you, you’ve just bought it After The Fact;),will be deleted from my iTunes directory, my iPod, and will be physically removed from my visible music collection
(which is well over 10000 records and 2000 CDs in total).
AND I WILL NEVER BUY MUSIC FROM “U” AGAIN !!
Unless.
your CEO [who should really be vetted before being allowed to speak, very poor public image for a true industry nobody that got luckier than he should have]publicly apologizes to HIS MARKET (in a press release) for being so callous and disenfranchising–TO THE VERY PEOPLE THAT PAY HIS RIDICULOUS SALARY
-or-
you fire his crass and undisciplined ass for threatening your future with verbiage [this btw would make me smile pretty big]
-just to clarify-
I don’t steal music, I never have. But the fact that your business is run by peeps with such little regard for their customers… kind of explains why it happened on Napster et al.. in the first place, don’t you think? If you have no respect for your market, why should they respect you?
1/2
2/2
here it is in bullets, in case you still don’t understand your customer that is writing this
1. You start buying out all the small players, in many cases swooping in for the kill when really all of these labels needed was a little investment.
2. You start jacking up prices on physical product, changing formats to force re-purchasing along the way (kind of what Microsoft is attempt with their iPod ripoff).
3. You start killing true a&r, and artist development, and then wonder aloud why your financial recoup isn’t at expectations (maybe you should try developing artists for a REAL amount of time, past their first hump). Instead you pretend to let the labels you bought out develop for you, only to shutter their doors once they’ve developed their existing roster as far FINANCIALLY as you think they can.
4. While you weren’t looking, simple hotline file trading and ftp sharing catapults into the monster that becomes p2p. You should have seen this coming, especially considering how much $$$ you waste on inefficient promotion techniques and PR shite. Instead, the U was too busy “acquiring” content to realize the world had developed a new way to distribute it.
5. Because you didn’t react fast enough, you lost LOTS of money (so did the other big guns. get over it)
6. Because you still didn’t react, a newly re-appointed Steve Jobs beat you to the punch, figuring out what hundreds of other content and device companies couldn’t.
7. After you realize that “this Apple stuff might actually work”, you use various offensive means to kill off the BIG thieves in the p2p arena, and try to scare the crap out of the public. You try multiple bad ideas for going on your own, mainly because they lacked the simple and effective design of iPod/iTunes.
8. You start whining that “we should have flexible pricing”, “we should control the pricing models”, “we can’t manage the system, because we not smart enough to, but it should still belong to us”. What don’t you understand about simple and effective? You guys/girls are worse than OPEC. Would you like to dictate how much milk and eggs should cost too?
9. Microsoft realizes they are never going to gain real traction in the market with PlaysForSure (like anyone didn’t see that coming). They decide to once again copy Apple play-for-play and announce the Zune (or is that iTurd?).
10. You see an opportunity to spoil the success, excuse me, THE ONLY TRULY SUCCESSFUL ONLINE CONTENT DELIVERY MODEL, ahem, by poisoning m$’s iPodalike with a petty overhead fee. Why should Microsoft care? They won’t sell a fraction of what Apple does. Or did last year. Or the year before. What kind of payments do you hope to see? $1000? $5000? $100 000 [that’s stretching it I think]. Your just trying to create what the dirt in your world calls “leverage” against Apple next year when negotiations begin again. How much will that mean next Xmas? A HELL of a lot more. If you truly believe the model isn’t Artist-Intended, DEVELOP A BETTER ONE! Oh wait, you’ve tried to (albeit late), OVER AND OVER AGAIN. And the public has flatly rejected every attempt you make to hi-jack their wallets.
11. Your CEO justifies all this with 1 sentence that completely and transparently puts on display the spite, irreverence, and disrespect your entire organization displays to it’s customers. And you wonder why they’ve stolen so much from you. Maybe you should have kept your CD prices in check at Retail! If I make a product for $5, and expect to see $5 profit on it’s sale, why would I let retail channels make more than I do? The consumer fallout you’ve suffered is NO ONE’S FAULT BUT YOUR OWN.
11 moments in time. 1 stupid sentence. First rule of business “listen to your customers”.
Now we know for sure how you feel about your customers. Unbelievable.
There ya go. A list of all their artists including…
Ashlee Simpson
Toby Keith
I thought UMG produced music….
Stuart Duel
Music Lover – Capitalism hater
Great letter, but you lost me on the capitalism part.
So what’s your solution? That the government should seize all music and make it available for free?
Never forget that capitalism is a good thing. But sometimes those practicing it get cocky and greedy, and need to be reminded how much they’re at the mercy of their consumer’s favor.
I think all you people bragging that you’ve paid for every single LP, CD, whatever of your music collection are nuts. What are you justifying? That you were completely suckered into paying extortionistic prices on something the artist gets only a fraction of? Please, stop being hipocrits and fence sitters and be proud.
Say it!
I’m a pirate, and I’m bloody proud of it.
And I’ll stop when I know that the money I spend on a CD is going to the artist, that software and music are priced comparably to their quality, not by their monopolistic death grips the corporations have on everyone. Don’t legitimise their existence and teach them some humility!
Time for music groups to elimnate the greedy middle men. Record your album and go straight to iTunes. No record label. This guy is calling his customers thieves. What a dope.
GE= Greed Enterprises
The company is laying off about 700 people from it’s NBC/Universal sub even though it is highly profitable. Kinda like hearing this from your boss:
You did a great job this year, profits are up substantially. You did a magnificent job. It’s too bad we are going to have to let you go.
Really Nice People
This give me no choice ; from no on ALL music from UMG on my iPods will be downloaded via any torrents. If the cocksocker call me a thief, I better live up to it !
rabid dog : you really don´t have a clue abous socialism do you ? (great “anal”yzis by the way )
= )
My e-mail…
I’m writing to you to complain about the remarks attributed to your Chairman & CEO, Doug Morris, with regards to the “theft” of music.
My iTunes library consists of over 9000 tracks and over 800 singles or albums. I’ve paid for every single one of those tracks, some of them several times over as I’ve purchased compilations, special editions and boxed sets. Much of my early music purchasing was mainly focussed on your own licensed repertoire as I was a devotee of the products of EG Records when they were licensed by Polydor in the UK, although they have long since been replaced by CD copies issued by Virgin, Caroline and others.
I have spent thousands of pounds on my music collection and have never purchased a second-hand record because (as a frustrated musician myself) I was morally concerned about the fact that the artist didn’t receive any benefit from this secondary transaction.
As you can imagine, I find Doug’s alleged remarks insensitive at best and crassly offensive at worst: I have supported your industry in a completely above-board manner for nearly thirty years and – in return – I have been branded a thief simply because I like to have my music collection digitised and available both on my Mac and on an iPod to suit my varying moods and tastes rather than regularly struggle to take 50 discs that might suit my needs as I wander around my local supermarket.
It would strike me that insulting the owners of over 70 million iPods by tarring them all with the same brush is monumentally stupid from a PR perspective.
In reality, the iPod and iTunes has actually re-awakened my enthusiasm for music by allowing me to explore more of my library than I ever listened to when it just sat on my shelves, however that enthusiasm has been tempered by some of the vapid rubbish that your company and others pump out. And now, you add a real insult to the metaphorical injury that you do to my appreciation of music on a daily basis.
Furthermore, I would argue that – for an industry that indulges in creative accounting to deprive artists of their deserved share of their labours whilst simultaneously indulging in questionable practices (I’ve never been prosecuted by the authorities in New York, which is more than your industry can claim) – Mr. Morris’ attempt to take the moral “high ground” reeks of hypocrisy and cant.
As I see no reason to reward those who hold my custom in such contempt, UMG can wave goodbye to any of my custom over the Christmas period which means I’ll be buying discs from your competitors as gifts for friends and family. And because I like to be consistent, your colleagues in Cinema and TV won’t be getting any DVD purchases either. Bear in mind that – until this latest outburst – I was not buying CDs from Warner Music Group (following similar comments from Edgar Bronfman Jr.) or Sony-BMG (never buy anything from anyone who thinks it morally appropriate to install “software” on your PC without your permission), but I guess Doug’s comments get these two of the hook otherwise my only major would be EMI.
This “sentence” will be reviewed should your CEO choose to issue an unreserved and unequivocal apology.
“and have never purchased a second-hand record because (as a frustrated musician myself) I was morally concerned about the fact that the artist didn’t receive any benefit from this secondary transaction.”
Nor should they. Music artists aren’t getting a one-time only fee for one piece of music. Any one particular piece of music is sold many, many, many times when it’s released.
Does GM deserve something from the sale of a used GM car, or the original owner of a house when the second owner sells it, or…well, I’m sure you get my drift.
They may want it (and I’m sure most do), but you have to think: where do we draw the line and with “what”? How many subsequent transactions do we allow someone to collect a part of?
Do we restrict it to just “artists” endeavors? Or should everyone receive benefit from secondary transactions?
I’m sorry, but neither “artists” (regardless of the artistic endeavor) nor anyone (or anything) deserves any benefit from secondary transactions. And I say this as an artist (non-music).
If you want to make more money (God knows I want to), make more more “art.”
And get better contracts. Educate the up-and-coming about the pitfalls of dealing with the labels.
Sorry about running on about this. FWIW, I think your email, was the best of emailed replys posted here. Succinct, angry but intelligently composed, and from an “insider” with a viewpoint.
I sent this to UMG
Sirs:
Your CEO, Doug Morris, has been quoted in Billboard Magazine refers to iPods and other MP3 players as “just repositories for stolen music”
I take great exception to such a prejudicial statement about listeners and music fans who own various devices to store and play music.
I have over 3000 songs on my iPod and EVERY SINGLE piece os music on my iPod has been acquired through legitimate purchases either from a bricks and mortar store or legally made purchase on the iTunes store.
The most recent addition (from Universal Music Group) to my library was The Who’s “Endless Wire” through the iTunes Store.
It quite frankly pisses me off that you would accuse me of stealing music.
I won’t boycott music from artists that you “represent” but I can tell you that I am revolted by the idea that you should be able to coerce even one penny from manufacturers of the iPod, Zune or other MP3 players for the devices themselves. I also use my iPod for data storage other than music.
Frankly, I despise the big labels such as yours who obviously do not have the interest of the artists at heart at all.
To me, Microsoft is just as repugnant for having capitulated to your demand for a “royalty” on devices such as Zune. It is wrong on every level.
What’s next? Will you demand a payment for every hard drive sold in the world because it might be used to store music.
I truly accept the concept of intellectual property rights. I have developed and sold software for many years. I respect IP rights but UMG obviously is trying to take the concept far beyond the domain of reasonableness.
What you are trying to do would be equivalent to demanding a royalty be paid for the manufacture of paper to authors and playwrights. It is unreasonable.
Thanks for the link to U music. I will not buy any more universal product.