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“Universal Music Group, the world’s largest music company, has declined to sign a long-term deal with Apple Inc.’s iTunes music store, leaving open the possibility for exclusive deals with other services, an industry source said on Sunday,; Yinka Adegoke reports for Reuters.
Adegoke reports, “Universal will continue to sell music and videos of artists including 50 Cent, Mariah Carey and Black Eyed Peas via iTunes on a month-to-month basis, rather than be locked in to a two-year agreement Apple had proposed, the source said.”
“In effect, Apple will now have similar terms to those that Universal already has with the majority of its retail partners,” Adegoke reports. “Some music executives have privately expressed frustration that Apple’s dominant position may have hampered growth of the fledgling digital music market by keeping users locked within the Apple system.”
MacDailyNews Take: No iPod is required to buy and play music from iTunes Music Store. iTunes Music Store use is not required to play music on iPod. Therefore: no “lock-in.” “Lock-in” is nothing more than a fantasy for the weak-minded and/or for those who’ve been soundly-whipped in either the device and/or online content markets.
Adegoke continues, “Universal, which produces one in three albums sold in the United States, has been leading the push by music companies to demand that new technology and media partners who want to license music share in the proceeds of the new products as well. Last year Universal signed a deal with Microsoft Corp. to take a small share of sales of its digital media player, the Zune.”
Full article here.
Okay, so it took Microsoft nearly a year to stuff the channel with 1 million Zunes, so if Universal gets $1 per Zune, they made a whopping $1 million? No wonder they want a slice of Apple’s iPods and iPhones. Microsoft’s Zune is a desperate joke. It’s the WNBA of the digital media device world.*
Mediocresoft was so late, with so little, they would have signed anything because without Universal, the Zune would have been even more of a flop (if that’s even possible).
Does Sony pay Universal Pictures a royalty for every TV they sell? No. Does GE pay Universal Music a royalty for every AM/FM radio they sell? No. But, Apple is supposed to pay royalties to Universal on every iPod and iPhone sold regardless of whether any Universal content is ever even played on Apple’s devices? Why, because Apple is insanely successful? Is that why they should pay royalties where no one else does? Nonsense.
Universal is thinking like a dinosaur because they are one. They are also nuts. Universal et al. are crazy dinosaurs who, if they can’t get their act together very soon, face certain extinction.
*Boring mediocrity that real people couldn’t care less about propped up by vastly larger organizations with agendas unrelated to the product itself. Ginned-up “interest” cannot sustain failure for long.
lets just start a grassroot movement today on MDN and say “PHOCK U UNIVERSAL” by boycotting all their music products.
i don’t listen to fiddy cent and mariah carey anyway…
who’s with me?
Universal = Greedy F^~kers.
My vote: boycott them!!!
Yes, they could burn it to CD, eating $ for the medium,
I must have forgot that iPod’s are free and there is no cost for using that medium for playing music.
if they DO want to burn it to a medium that fits 12 songs on a size that doesn’t EVEN fit in your pocket, they have to use iTunes to do it.
It fits perfectly well in their carrying cases along with their DS Lite and games, cell phone and so on. The music travels with them as easily as anything else.
But if they wanna play it on either of the two things that people actually play music on, either of the platforms which it’s INTENDED to play on (computer or portable music player), they have to use Apple’s.
It is your opinion only that the music is intended to be played on a computer or iPod. They prefer to use CDs. It is extremely portable for them and there is no lock down to loan to their friend’s to listen to. It is cheap, it is reliable, and it is easy. So for them, it is intended to be used for creating CDs. Fortunately, they can burn CDs to give to their Grandmother who has no computer or iPod.
Your way isn’t the right way for everyone. If you can pull your head away from watching Shawshank Redemption again, maybe you wouldn’t be so obtuse.
As some have already suggested, established artists will be the first to break free of their contracts and go it alone, and there are several avenues they can pursue to post their wares on iTunes.
The record companies are dying, and they know it. They’ve been screwing artists forever, and there is no good will left between most artists and their labels. The major’s are getting increasingly desperate for cash, taking away almost all sources of revenue from their artists (merchandising, etc.) Their days are numbered.
iTunes (and Apple’s inevitable non-DRM competitors) are the future of music, and probably other forms of digital entertainment as well. I expect prices will go down as competing services to iTunes eventually gain a foothold. This won’t hurt Apple as they don’t rely on iTunes as a source of income. In fact the competition will only make Apple stronger in the long run.
What gives Apple the right to a cut of AT&T’s phone revenues for every iPhone sold.
Does Apple own the network or does AT&T?
Just asking.
> What gives Apple the right to a cut of AT&T’s phone revenues for every iPhone sold.
Because that’s the deal they made; AT&T (Cingular) obviously saw value in making such a deal, unlike Verizon. Universal is in no position to “demand” a cut of iPod and iPhone sales. As you can see, Apple said NO WAY and Universal caved in, because Apple is the third largest music retailer in the U.S.
And from a common sense perspective… Apple gets a cut from AT&T because Apple supplies every device for which the cut is received. Universal wants a cut because the iPod or iPhone user may have “stolen” music from Universal’s catalog. Since any business passes on costs to the customer, each user will be paying extra because they are assumed to be “thieves” by Universal. That’s the common sense difference.
MDN,
Make your comment but please refrain from making fun of women’s sport, it’s so 1970s.
” Universal has a brilliant new negotiating tactic.
“Give me what I want or I’ll shoot myself in the foot!” “
The phrase “Cutting off your nose to spite your face” seems more apt.
So next Universal wants a cut of all the radio, CD players sold?? Maybe my firstborn?
Greeeeedy bastards
“I wonder why MDN has chosen not to report the DECLINE of Mac software/hardware.
http://marketshare.hitslink.com/report.aspx?qprid=3
http://marketshare.hitslink.com/report.aspx?qprid=5
Internet Explorer use went up! GO MICROSOFT!”
Huh? I’m confused. Last year, IE had 83.56%, Safari was 3.16%. Now it’s 78.84% for IE and 4.49% for Safari. Granted there are some flucuations month to month but the trend is obvious.
They have a snowballs chance in…
It’s about the music. Lawyers suck.
I ain’t gonna be paying shit to Universal, while buying an iPhone. I pay when I buy the music.
They gotta be fucking crazy.
“Granted there are some flucuations month to month but the trend is obvious.”
Sure is obvious:
Safari has dropped 7% last month despite launch of the Windows version.
WinTel Mac use has dropped 1% and PPC Mac use has dropped 12%
And meanwhile Windows Vista use increased 21%
Coincidence?
“Sure is obvious:”
When you look at totals for all of the vendor’s OS’s.
Apple went above 6% in Jan 07 and has been flat within an 0.4% band ever since.
Microsoft has been flat within a 0.8% band between 90 and 91% the whole last year.
Summary.
Microsoft’s not loosing any significant share, and after a step up in installed base when the new Intel Macs were released. It’s settled to a point where the faithful are swapping PPC Macs for Intel ones.
There’s a reason why “Computer” is gone from the name and Apple is releasing Mac software for Windows. Steve can see the writing on the wall.
Big deal. So buy the CD and load it into your computer. Besides, the new releases as “critic” above pointed out are crap. And anything decent I already own.
I’d rather iTunes not deal with them.
If there WAS anything I desperately wanted I coud just borrow the CD from a friend and load it to Laptop > iPod anyway.
Pound salt Universal.
If Universal disappears from the iTunes Music Store, pirated Universal music will pop up everywhere on the internet and even honest people like me might consider it for the first time.
Go ahead Universal, make my day!
“There’s a reason why “Computer” is gone from the name and Apple is releasing Mac software for Windows.”
Apple explained this…in rather plain and simple english…they don’t just make computers and software anymore. How hard is that to understand?
“Steve can see the writing on the wall.”
In your dreams.
If I don’t find what I’m looking for in iTunes, very simple I’m go to visit one of thousand “music pirates” website and download it for free…..do you like that Universal????
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Go Ciber-Pirates again Universal
Like Universal is really going to pull their music from the third-largest retailer in the US. Universal is not going anywhere. Neither are any of the other big music players. And Apple knows it.
“they don’t just make computers and software anymore. “
Soon to be they Just Don’t make computers and software any more.
“Like Universal is really going to pull their music from the third-largest retailer in the US. Universal is not going anywhere. Neither are any of the other big music players. And Apple knows it.”
Nor is Apple going to loose a major player in the music, TV and film industry from iTunes and Universal knows it. All both sides are doing is posturing and arguing about is how to split up the money.
I hope Universal knows what they are doing in threatening a monthly contract with Apple. Either it is a ploy to extract a better deal from Apple and they intend to sign a long term deal, or they have a deal with someone else up their sleeve.
Moving to a monthly deal would mean Apple would have to offer them a less favourable deal financially (less % per song/album). With the increased lawyer fees for negotiating monthly, it is likely to hurt Universal a lot more than they gain. And given Universal’s stance on DRM, they have refused to accept the higher value DRM-free songs.
The world is not about to give up their iPods or iTunes. If we search for an artist and don’t find them in iTunes, we buy someone else (or don’t buy at all, or pirate it). All this would mean less cocaine & heroin for the artists, and we would hate to have that happen.
The world has rejected ZunesForSure players and unless some online shop suddenly is able to offer a huge catalog of DRM-free songs, we will stick with iTunes. And even if such a shop did exists, it would have to offer songs at the same price as iTunes or less and pay Universal the same fees or higher.
“With the increased lawyer fees for negotiating monthly, it is likely to hurt Universal a lot more than they gain.”
I doubt it’s anything other than a contract which automatically renews month to month unless terminated. So no negotiation, just the ability for Universal or Apple to walk away, or change terms with 1 month’s notice.
“mean Apple would have to offer them a less favourable deal financially “
Why?
As noted, they both need each other. As much as companies want to get their songs on iTunes, it’s not the only route to people buying songs for an iPod. It’s not even the most commonly used way of buying songs for iPods.
However iTunes without content from major labels wouldn’t be much use.
So Steve’s not going to let Universal walk away.
“unless some online shop suddenly is able to offer a huge catalog of DRM-free songs”
What makes you think that Universal wouldn’t rather set up an online store selling DRM free songs for all players rather than sell DRM free songs through iTunes?
Regarding the person who said Universal loses 15% of their business, but Apple loses 33% of their business, so perhaps Apple has more to lose: Apple just about breaks even on their iTunes sales–its main purpose is to drive sales of iPods–so they’re hardly losing any money. Universal, however, assuming they’ve sold roughly 1/3 of the 2.5 or so billion songs sold on iTunes, and assuming they get $0.90 per song, has made about $742,500,000 (2.5 billion songs x .33 of iTunes songs sold x $0.90). So who has more to lose? I’m guessing that people who download songs from Universal’s other online music outlets will either put lots of those songs in the iPod or, if they’re protected, will find ways to do so anyway. Or, of course, use Limewire or any of the other peer-to-peer networks to get their music. Overall, I don’t think Apple will suffer much as a result.
As someone else said earlier, “Remember, dinosaurs had very small brains.”