Report: Universal Music Group Declines to Renew iTunes Contract
July 2, 2007 1:27 PM
comment(s) - last by
Experts say going up against Steve Jobs isn't a wise move
release of the iPhone on June 29th
, Apple took a bold step into an industry it has never before been in. Facing stiff competition is something that Apple's been use to doing for a long time now. This week however, Apple faces a surprise turnaround from one of its partners in the online music industry, an area where Apple is the dominant force.
Universal Music Group of Vivendi last week sent notification to Apple indicating that
it would not renew its contract to sell music on Apple's iTunes store
. The move comes after much negotiation between UMG and Apple. Unfortunately, music industry experts say that the grip that Apple holds on online music sales is what's discouraging UMG.
UMG has a long list of artists including notable names such as Akon, Rhinna and U2. However, Apple itself packs a punch in the amount of revenue that it brings to UMG. In the first quarter of 2007, Apple's sales on the iTunes store brought in more than 15-percent of UMG's worldwide revenue -- that's more than $200 million USD.
According to unnamed executives, UMG is looking into other sources for revenue, either through other channels or possibly a store of its own. Apple's long time control over what devices can play its music has troubled a lot of music lovers as well as publishers. Just recently however, the
iTunes store began selling DRM-free music
Ken Hertz, an entertainment lawyer representing such artists as Beyonce and Black Eyed Peas warned against going up against Apple directly.
"When your customers are iPod addicts, who are you striking back against? The record companies now have to figure out how to stimulate competition without alienating Steve Jobs, and they to do that while Steve Jobs still has an incentive to keep them at the table," said Hertz.
Since the launch of iTunes, Apple has controlled prices of music on its store. This is one area of concerns for music publishers who either want more revenue or are looking into other areas for revenue. The iTunes model has proven itself to be a success formula for music sales however. Before the advent of online music stores, consumers were forced to buy whole CDs and often times received only one to two favorable tracks while the rest were throw-ins.
This article is over a month old, voting and posting comments is disabled
If you are a UMG singer, what would you do?
7/2/2007 10:56:34 PM
I am not surprised to see some artists flee to other record companies. A big reason to blame pulling out from iTune for declined record sales, though the songs may not be good. Also can't buy his own songs in his favorite iTune.
"We don't know how to make a $500 computer that's not a piece of junk." -- Apple CEO Steve Jobs
Apple Sells 525,000 iPhones in Three Days
July 2, 2007, 12:00 PM
iTunes Now Offering DRM-Free Music Tracks for $1.29
May 30, 2007, 12:12 PM
Twitter Senior VP: "Diversity is Important, But We Can’t Lower the Bar"
November 9, 2015, 9:59 AM
CNN Resorts to Internet Censorship to Promote Clinton Over Senator Sanders
October 15, 2015, 2:47 PM
Breaking Bad: How to Crash Google's Chrome Browser With Just 8 Characters
September 23, 2015, 11:08 AM
Quick Note: Amazon UK Offers £10 Back on Any Order £50 or Over
August 3, 2015, 12:05 PM
Editorial: Reddit Allows Itself to be Hijacked as a Hate Platform For Racist Bigots
July 21, 2015, 6:32 PM
Mozilla and Facebook to Adobe: It's Time to Kill Flash
July 20, 2015, 6:30 PM
Most Popular Articles
Get Ready to wait in line – iPhone 7 due September.
August 18, 2016, 7:15 AM
Lenovo vs. Asus vs. HP - Best Laptop Under $500.00
August 19, 2016, 4:00 AM
Wearable Technology for Peanut Allergy Sufferers: By Monique Bethell Ph.D.
August 17, 2016, 6:40 AM
5 Healthy and Creative ways to add Fiber to your Diet By Monique C. Bethell, Ph.D.
August 18, 2016, 7:43 AM
Fuchsia – Google’s New Open Source Operating System
August 17, 2016, 6:30 AM
Latest Blog Posts
SolarCity’s Gigafactory: A Milesone in Emerging Technology by Lily Emamian - 15 August 2016
Aug 15, 2016, 6:30 AM
Sceptre Airs 27", 120 Hz. 1080p Monitor/HDTV w/ 5 ms Response Time for $220
Dec 3, 2014, 10:32 PM
Costco Gives Employees Thanksgiving Off; Wal-Mart Leads "Black Thursday" Charge
Oct 29, 2014, 9:57 PM
"Bear Selfies" Fad Could Turn Deadly, Warn Nevada Wildlife Officials
Oct 28, 2014, 12:00 PM
The Surface Mini That Was Never Released Gets "Hands On" Treatment
Sep 26, 2014, 8:22 AM
More Blog Posts
Copyright 2016 DailyTech LLC. -
Terms, Conditions & Privacy Information