RSSUniversal Confirms iTunes Rumors
By Ed Oswald | Published July 5, 2007, 1:42 PM
Universal has confirmed earlier reports that it was seeking to end its long-term agreement with Apple's iTunes.
Reports first surfaced in The New York Times on Monday that the label was looking to end its long-term contract with the digital music provider and instead opt for an "at will" contract.
These types of contracts are usually reserved for smaller distributors, but industry insiders say the change is aimed at giving Universal more leverage over iTunes in setting terms and perhaps even the price of music.
Universal has been one of the most aggressive in its digital music strategy, even signing a deal with Microsoft last November to receive a cut of the sales of that company's music player, the Zune. Its stance on the issues may even cause others to follow suit.
Confirmation of the change in contract came in a statement on Tuesday. "Universal Music Group has decided not to renew its long-term agreement for Apple's iTunes service. Universal Music Group will now market its music to iTunes in an 'at will' capacity, as it does with its other retail partners," it said.
What this could mean to users is that if relations sour between the two companies, or they do not agree on terms for a specific artist, song, or album, songs that currently are on the service from the label could be pulled, or new music withheld.
The stakes, though, are high for Universal and Apple. 15 percent of the music sold on iTunes is the label's, and messing with the catalog could disrupt a major revenue stream for Universal. Apple, on the other hand, stands to lose from the departure of certain acts, as it is believed that Universal wants to offer bands' material exclusively via other providers.
Although not confirmed, it is also believed that the recent dustup may have something to do with the launch of ITunes Plus, its DRM-free service. Universal is one of the most pro-DRM labels in the industry.
Apple had not commented publicly on the matter as of press time.
It looks like U2 is on the UMG label, how ironic considering the U2 edition iPod.
Score: 0
|sigh , can you say "obsolete business model". most of these companies still don't have a clue how to make money in the digital music age. It's like big dinosaurs that won't move out the way of the giant asteroid called the internet that's bout to fly up their ass. Give the consumer what they want, cheap no hassle music. When will they learn that they should be begging us for our business not us begging for their overpriced products? I couldn't care less about apple, but at least they seem to be moving in the right direction.
Score: 0
|Why stop there? Why not just pull all your music from iTunes? Who cares?!
From now on, if I want music that is available only from Universal, I doubt that very much, I'll just "download" it, free and DRM free.
Universal greedy pigs. I am sorry I just insulted pigs.
Score: 0
|Pigs are actually pretty smart.
Score: 0
|Everyone should stop listening to Universal artists anyway. The music Universal releases is bland, obsolete mind fluff that is the equivalent aural McDonalds. Put the money in the artists pockets and end the music "industry".
There are plenty of small online stores where you can find good, real music. Look around at some of the boutiques listed at:
http://en.wikipedia.org/..._of_online_music_stores
Score: 0
|chomp chomp
Score: 0
|The funny part here is that Universal is not in a position to dictate the price. If they choose to withdrawel, they will lose all the revenue that iTunes is generating for them.
I think Universal is trying to play chicken but they're not in the drivers seat, I'm sure Apple will happily continue without them.
The real question is how will this affect previously purchased Universal music. Can they revoke the license so existing users can no longer ? (doubtful, but not sure what the EULA states with regards to this).
Score: 0
|Apple should just drop Universal all together till they come to their senses.
Score: 0
|And after Universal forces iTunes to charge more for music it will force WalMart to charge more for CD's too.
At least that's the plan, if they can survive a brawl with the fast growing music retailer.
Score: 0
|heh all these new Enviromentally safe CD's their selling made of recycled materials and less packaging and their still sold at wal-mart for the same price.
Score: 0
|Oh Ed... Universal just want to give the same treatment to iTunes as they do to everyone else. This isn't news - it's an opinion piece! The only quote in this entire article says simply that.
Score: 0
|I thought we visit BetaNews for analysis of the stories, not just news. Ed is simply analyzing the news for potential impact. For those of us who don't know everything about everything it is nice to have someone else who is knowledgeable tell us what it could mean. Otherwise, we would just say "okay, their long term contract ended...so what?"
Score: 0
|Talk about biting the hand that feeds you. Universal has a nice steady income with iTunes. I hope this comes back to bite them in the ass.
Score: 0
|agreed!
Score: 0
|