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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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Monopoly
By shamgar03 on 12/2/2006 8:49:40 AM , Rating: 1
It seems to me that this is really grounds for an anti-trust case. Look at it this way, Universal has a monopoly on X artists songs or X movies. Songs aren't like other items, you can't get generic versions of Eminem or Dido. When people buy a song they don't won't a band that sounds like the band they want they want the band. So its inherently a monopoly. Because of this, Universal can use its monopoly status to basically extort money from various music services. This is like if a company that was the only company able to generate power in the united states decided that it wanted a cut of computer sales...and no one could do anything about it because it was the only company with permission to make power.




RE: Monopoly
By Moose1309 on 12/2/2006 2:08:44 PM , Rating: 2
Not really a monopoly - more like mafia practices like I said above. There's a difference between having 100% market share and shaking down someone in a completely different industry by threatening them.

The real issue is that the music industry serves no useful purpose anymore. If anything, it needs to be seriously downsized. The original raison d'etre is to get records and music out to people - guess what, that now happens for free digitally. "But the poor artists don't get paid," you say. Well they don't get paid for CD sales either - "We're promoting them," say the Dons at Universal, "that's all the payment they need." Barenaked Ladies just made available their newest album alongside an unreleased one on a Flash drive in non-DRM'd MP3. They said on the radio this morning "if you like it, come to our show." I think these **AA criminals see the writing on the wall for a dinosaur industry. Change your business to something legitimately useful, and you get paid. Stop shaking down others.


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