Zune Profits Go To Record Label

genegeek writes, "The New York Times reports that Microsoft has a new deal with Universal to share profits from Zune player sales. David Geffen, the media omniboss, is quoted: 'Each of these devices is used to store unpaid-for material...' The new business rationale is that stolen music should be paid for by profit sharing of newly sold Zune music players. Does that mean if you are not stealing music, you should get a discount on the players? Universal expects a similar deal from Apple when their current contract expires." Reader Gallenod adds, "Microsoft appears willing to spend millions and defer any potential profitability of the Zune simply to weaken Apple's bargaining power with recording companies and set a precedent for hardware manufacturers paying music companies."

Comments

Great

[AoT]

"set a precedent for hardware manufacturers paying music companies."

Yeah, remind me to thank Microsoft for all this 'innovation' they've done for the customer the next time I'm up in Redmond.

'Each of these devices is used...

[jimstapleton]

'Each of these devices is used to store unpaid-for material...'

Really? That guy is a dipshit (pardon my language, but nothing "softer" is better at describing this)

WTF. /NONE/ of the music on my portable mustic player is or has ever been stolen. I know plenty of people in the same boat. Admittedly none of them are Zune, but that that doesn't make the asshat's claim any less false.

Expects to cut the same deal with Apple?

[R2.0]

Didn't the record labels try to "alter the deal" the last time their contracts were up?

Didn't Jobs spank them back into submission?

Can't see it any different this time.

What do customers get from this?

[ronanbear]

Microsoft pay Universal money for each Zune sold. Maybe that helps them get a better deal with Universal songs on the Zune Marketplace. The songs will still be $0.99 though.

The other record labels don't get any money so they seem to be losing out.

What about European/rest of world customers? Does this mean that the Zune will be a different price in each country due to licensing requirements? What about not available?

To me this looks like honest customers being charged for music twice. The RIAA has been quite vocal about p2p piracy. Does this mean they won't go after Zune owners? I don't think so.

I'd want money from Universal then...

[Incongruity]

They're trying to charge me (indirectly) for stealing their music (which I don't, never have, and never will) -- so I'd want my money back. Greedy bastards. How dare you treat customers like presumed crooks?

Here's hoping Apple will hold strong

[IAmTheDave]

I can't wait for Apple's contract to come up, and for Steve Jobs, still owning a good 85-90% market share, to bitch-slap these new Zune-happy CEO's to the ground like the little greedy trolls they are.

Yeah right...

[twofidyKidd]

"Microsoft appears willing to spend millions and defer any potential profitability of the Zune simply to weaken Apple's bargaining power with recording companies and set a precedent for hardware manufacturers paying music companies."

This will go over like gangbusters with Apple and consumers alike. To think that the record industry will try to leverage a deal with another business with regards to consumer goods (music) is ridiculous. Nevermind the fact that Apple will simply leverage their massive iPod fan base against the labels, customers just won't stand for it. Especially when the market for digital media players is already supported by people who have proven they are willing to pay for music, a label-imposed "tax" on those players to cover "stolen content" won't fly.

Both Ways?

[longbot]

So, does this mean that if I own a Zune, that I'm then entitled to pirate enough music to fill it? And if not that much, then where do they intend to draw the line? After all, if I've already effectively paid for the lost profits from pirated material, why would I want to pay twice?

What they expect and what they get are different.

[Viewsonic]

This is kind of amusing. So does this mean if we pay a "piracy tax" up front, that we can then pirate music? And how can a music company possibly expect Apple to make some sort of deal like this. Are they going to boycott Apple if they don't? Haha.

pissing in the pool

[mgblst]

Ok, who invited Micrsoft, their pissing in the pool again.

Great strategy, if you lose, then wreck it for everyone.

On the flipside...

[MrAnnoyanceToYou]

If I'm paying for pirating music before I do so, it's now ethical for me to pirate however much music I want.

The amusing thing here is that the 'prepaid pirating fee' doesn't go anywhere near the artists. Ever. It's just an inter-company corporate bribe. Between monopolistic organisations. Man, can't you feel that capitalistic efficiency?

Nothing like paying twice...

[gillbates]

Under the deal, Universal, the world's largest music corporation, will receive a percentage of both download revenue and digital player sales when the Zune and its related service are introduced next week.

So let me get this straight: you pay Universal when you buy the device, and then you pay them again for the music you load on to it?

What if I never listen to any of Universal's music?

What really strikes me as ridiculous is that Universal's terms seem to imply that even a legitimate music purchase is still piracy .

At this point, the only moral thing to do is to stop buying music. You aren't going to appease the record companies - they'll call you a pirate no matter what. If we all stopping funding the RIAA lawsuits, maybe they would go away.