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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: Lawsuit protection
By Moose1309 on 12/2/2006 1:58:46 PM , Rating: 2
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 http://www.dvorak.org/blog/?p=8331


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