Universal Music Group Seeks Music Tax from Apple
December 1, 2006 3:27 PM
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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,
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.
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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12/2/2006 9:31:46 AM
There are a few countries where their recording industry has levied "taxes" on things such as blank media. You may be say $2 more in Canada for a spindle of cd-r's. This was an agreement with the manufacturers and the government to help curb the industry effects of piracy. You pay money assuming that you will use the discs to pirate music or whatever. You pay regardless of whether you are or you aren't. In effect, if you pirate a disc you already paid something to the industry for it and in some countries the casual citizen is ignored for doing so. I figure as long as you aren't cranking them out and selling them. People have argued that they shouldn't pay if they aren't pirating as there are many other uses for media, but the tax has stayed.
If this is the case and I have to pay extra for an ipod or whatever on the basis that royalties are being collected so the cost will pass to the consumer then I want some rights. If I have my ipod confiscated I don't want to hear crap about what music I have on it. Technically I already payed for "royalties" when I purchased my device, and the device did not have any content on it. So, that means that I should be entitled to fill my device. I would like to see this go to court especially with the Zune. The RIAA may have kicked themselves in the arse for setting a pre-sale precident. Paying royalties on a device without content is assuming a great deal. My ipod has music I created, indy music and private work data which does not involve anything with an AA at the end. I have no ripped cd content that I did not get straight from the band and I have never once purchased a piece of music since the first DRM'd cd's rolled out. These people lost my business a long time ago so why should I pay a royalty for a device that will never see any of their content? And if I did pay that royalty would that not be compensation based on the theory that I will pirate music and by that rational would said roylaties not be considered payment for any pirated music found on the device.
Hopefully the **AA's will all go out of business. Eventually they'll screw up and sue Bill Gates or something by mistake and he'll sue them out of business. Or maybe the government will take its head out of its arse and realize that they are a monopoly with no business model at all. Hell, an 8 year old could probably figure out how to sell music better than these losers. They spend so much money on DRM and useless anti-piracy campaigns just to have a number to pass off as losses for the year because of piracy. I have an idea, make good music and sell it. Every artist should realize that they are hated because of their label. Drop them after your first album that they over hype into a hit and then tour and sell your own music, people won't hate you and will buy.
RE: Lawsuit protection
12/2/2006 1:58:46 PM
You are absolutely right. This is nothing more than a Mafia business model: let's figure out who is successful, and has made a lot of money on a good product; and shake them down. MS has a similar model with the Novell deal: they're just claiming that anyone running Linux owes them money, regardless the the actual legality involved.
Dvorak said roughly the same thing as you on his blog
"Spreading the rumors, it's very easy because the people who write about Apple want that story, and you can claim its credible because you spoke to someone at Apple." -- Investment guru Jim Cramer
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