Universal Music Group parent Vivendi calls Apple iTunes contract terms ‘indecent’

&mpApple iTunes“Vivendi condemned as ‘indecent’ the contract terms between its Universal Music Group (UMG) unit and Apple Inc, the computer maker whose iTunes online store dominates the digital music market,” Astrid Wendlandt reports for Reuters.

MacDailyNews Take: If it was so “indecent,” why did they sign the contract? Of did it have some “indecency time bomb” built into it that only just now went off?

Wendlandt continues, “Vivendi is one of many large media companies that are trying to challenge Apple’s grip on the digital entertainment market and obtain more control over pricing. It said it was in talks with rival distributors.”

MacDailyNews Take: Oooh, we’re sure Apple’s shakin’ now!

Wendlandt continues, “‘The split between Apple and (music) producers is indecent … Our contracts give too good a share to Apple,’ Vivendi Chief Executive Jean-Bernard Levy told reporters at a gathering on Monday organized by the association of media journalists in France. At present, UMG, the world’s largest record company, gets 0.70 euro ($0.99) out of the 0.99 euro retail price charged by iTunes, Vivendi said. Among other things, Levy called for the remuneration of a new release to be higher than for a 30-year-old classic. ‘We should have a differentiated price system,’ he said.”

MacDailyNews Take: Reuters must have left out some things because we swear we heard someone say, “We should have a differentiated price system, so that we can charge more. After all, we are a greedy music cartel. We want a ‘differentiated’ system, which (wink, wink, nudge, nudge) really means we want to charge more for what people are buying and less for what they’re not, thereby giving the false impression of lower prices while we’re actually charging and making more money. They don’t call us fargin’ greedy bastages for nothin’. Capisce?

Wendlandt continues, “UMG renews its music distribution contracts with Apple every month after having failed to agree a longer-term arrangement earlier this year. The music publisher can end its contract with Apple at one month’s notice, but Levy declined to say whether UMG was ready to bypass Apple altogether. ‘We are in a phase during which many different actors are talking to each other … We are trying to put in place several projects to ensure that music is better remunerated … We are not just talking to Apple,’ he said.”

MacDailyNews Take: Oooh, big man. Go ahead and do it, Mr. Big. Come on, do it, we dare you.

Wendlandt continues, “Levy forecast that ‘in the not so distant future,’ traditional music products such as DVDs and CDs would make up less than 50 percent of music publishing revenues. At the half-year stage, digital music sales made up 15 percent of UMG’s total music revenue.”

MacDailyNews Take: 90% of which comes from Apple’s iTunes Store which is why Levy talks like Mr. Big to reporters, but dutifully signs the dotted line of his monthly iTunes contract like the neutered wimp he is.

It’s a good thing that no reporter named Penny was there or Jean-Bernard Levy would have smashed right through the podium, grabbed her, and started screaming, “It’s mine, ya understand? Mine, MINE, all MINE!”

Full article here.

63 Comments

  1. Quad Core…

    The point that you’re ignoring is that Wal-Mart might actually be pricing its CDs at a loss or near break-even so as to tempt people into their cavernous warehouses and to kill off local competition: that’s certainly the case with the supermarkets here in the UK, where I suspect a close analysis would reveal that they make what little profit they do make out of retrospective bulk discounts with the labels’ distribution arms.

  2. Music labels used to hold the big stick not because they were instrumental in advancing the development of music, but because they had the distribution and promotion channels (mainly radio) locked down and oiled with lots of moolah handouts.

    That power allowed them to be the “Gods” in the music marketplace, screwing artistes and consumers at will, and becoming all powerful.

    But suddenly, the digital revolution took off and they were caught with their pants around their feet. Before they could buckle up again, Apple had stepped in and firmly taken over the reins.

    Now, they are going to keep trying to regain that hold on consumers’ purse strings, and it is Apple that stands in their way.

    So I don’t think it is the pricing so much as the loss of total control that’s put a bug up their behind. Pricing is just one of the excuses they are trying to use as they desperately try to regain their lost power.

Leave a Reply to Freddy the Pig Cancel reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.