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Analysts expect more music studios to follow

Apple may have to pay royalties in 2007 for every iPod shipped in 2007 if Universal Music Group successfully negotiates an agreement with Apple. Earlier this year, DailyTech reported that Universal had struck a deal with Microsoft and its Zune portable music player. Microsoft would pay royalty fees for every song downloaded by a user and every Zune player sold. Similar to a tax, this contract was definitely a big win for Universal and the music industry.

Now, Universal is indicating that it wants to have the same contract setup with Apple too. According to Universal's chief executive Doug Morris, he is already communicating with Apple about the possibility of an agreement. Analysts are uncertain about Apple's decision but based on the outcome Universal had with industry giant Microsoft, it is likely that the situation between Universal and Apple will be coming out the same.

In a Reuter's report, Morris said "it would be a nice idea. We have a negotiation coming up not too far. I don't see why we wouldn't do that... but maybe not in the same way. The Zune (deal) was an amazingly interesting exercise, to end up with a piece of technology."

It will be certainly interesting to see the outcome that Universal has with Apple, considering that Apple leads the number spot for portable music players. The iPod is such a staple of the portable music industry scene that it was certainly difficult for Universal to ignore. Other major music studios and labels may end up seeking similar negotiations


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Less filling, tastes great.
By MonkeyPaw on 12/1/2006 5:34:04 PM , Rating: 3
Think about it, now that we can pick and choose what we want to purchase on a CD, music companies/labels can no longer make full price on a CD of mostly crap, remixes and 1-2 good songs. Since the consumer has the power of specific choice, it put the burden on the labels and artists to actually be good at what they do. Piracy is the scapegoat for everything in the business, but what I really think is going on is that they don't like seeing their cash-cow get robbed. Rather than improving the content (versus stretching talent out over 5 "albums"), the answer is taxes, royalties, and increased per-song download prices. Yet again, computers have proven that some people's jobs are obsolete or unnecessary.




RE: Less filling, tastes great.
By Mudvillager on 12/1/2006 6:37:32 PM , Rating: 2
That's exactly how I'm feeling about all of this. Mainstream bands will be preasured to create good music to be able to survive and the music scene in general will become a lot healthier. Labels that operate like Universal have no place in the Internet age.


"Mac OS X is like living in a farmhouse in the country with no locks, and Windows is living in a house with bars on the windows in the bad part of town." -- Charlie Miller

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