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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Music industry = musicians
12/4/2006 11:27:26 AM
When all of you lambaste the music industry it seems that you're forgetting something - that the people creating the music get only get compensated for sales of their recordings through the collection efforts of the "Music Industry".
Before the days of recorded music, if someone wanted music, they had to pay a musician to perform it. Now all they have to do is pop in a CD or play an MP3. It's easy to see how musicians have lost from this - why spend to hire musicians to play at your party, bar, restaurant or whatever if you can just pop in a CD, plug in an iPOD, or at worst hire a DJ?
For all but a few pop sensations, recorded music has been a bad deal for musicians. Anything that helps musicians get paid - and they should be paid every time one of their songs is played on any device - will be an enormous benefit to musicians. For this reason, it is important that companies with the size and clout of Universal Music - which represents a large number of musicians - use their leverage to make the emerging world of digital media one that encourages investment of time and effort by artists.
"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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