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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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RE: Fair?
By BillyBatson on 12/1/2006 7:16:05 PM , Rating: 3
I agree with you. In my household we have owned 6 different Ipods, 4 at any given time, and we have never purchased a single song from Itunes. If an Ipod came preloaded with content (such as the zune?) and soem if not all of that content was from universal, i would understand the tax. However if there isn't any media on the ipod and it is just a hardware media player then there is no reason for them to see any royalties from the sale of such devices. What next? Tv's will be taxed by the movie industry? so wrong.
They are all trying to reach out for profit that doesn't belong to them yet they slap our hands away when we try to reach out for content that isn't ours.


"Death Is Very Likely The Single Best Invention Of Life" -- Steve Jobs

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