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Universal Wants a Slice of Apple's iPod Pie
vought writes "According to a Reuters report, Universal is now taking the precendent set by Microsoft's Zune and moving to force Apple to include a royalty payment with each iPod.
In the words of Universal Music's Doug Morris, 'These devices are just repositories for stolen music, and they all know it. So it's time to get paid for it.' Does Microsoft's precedent mean the start of a slippery slope that will add a 'pirate tax' to every piece of hardware that touches digital music?"
Doug Morris,
In the regretful, embarrassing, yet immortal words of Dick Cheney...... " Go F$@% yourself ".
I personally take offense at the allegation that there is *any* stolen music on my iPod or any of my computers. All of my music has been purchased on CD or the iTunes Music store as it is on most of the peoples iPods and computers that I know of. Your allegation suggests that you actually do not know about your potential customers, their desires, technology or most disturbingly, the music industry itself. Apparently, you also don't seem to be able to understand that you need to out-compete the piracy industry by offering a quality product at a reasonable price and in a manner that is easy for people to pay for. Marketing 101 tells us that the way to make money is to create a product people want and then remove any barriers that will prevent people from *willingly* giving their money to you in exchange for those goods or services. The iTMS has shown you how it is done, yet you get in bed with Microsoft who apparently cannot design a device that will compete in the same arena with the iPod, then you force people to buy points that they can then exchange for music *and* you want a slice of the hardware market. If you want into that market, why not create your own hardware? To do anything else is leveraging your monopoly to extort money from another industry and the last time I checked, that behavior is illegal.
So, quit whining about all the pirates and do something constructive that adds to your product or services rather than placing restrictions on your product that makes it less appealing to the end user or customer. Oh, and while you are at it, you might want to put more energy on finding good musical talent for the music industry. Its out there, but you need to stop focusing on engineered pretty boy and girl acts and put more effort into finding and promoting real talent.
Visit Jonesblog and say hello.
I hope Apple tells them where they can take their Zune and stick it where the sun won't shine. This is just one more reason not to buy a piece of crap Zune. I certainly won't be trading in my iPod for a Zune EVER.
At what price learning? At what cost wisdom? The price is a man's peace of mind, and the cost is his life.
So I guess now once you buy an ipod, you can download as much pirated Universal music you want, right?
Fuck you. I've spent hundreds of dollars at the iTunes Store, and thousands buying CDs at retail over the past 15 years. Again, fuck you.
"What we elect to call imagination is mere combination of things not heretofore combined." - Frank Norris
The insanity of taxing a piece of hardware for what a small portion of its users could possibly use it for aside
(Has this guy even heard of iTunes? People are paying for this stuff), if he wants a tax on the ipod to cover stolen music which it could be used to play, then I think implicit in that is the allowance that, after paying this tax, you can use an ipod to play all the stolen music you want, legally. I belive the recordable digital media tax in Canada works something like this. But what you can't do is tax someone for something, and then sue them for doing the same thing that tax covered.
I really don't pirate music -- honestly. I've downloaded a few mp3s and if I like them, I buy the album. Now if they add a pirate tax to my mp3 player, that's a green light for me to turn pirate. I've paid my tax.
What kind of logic is this???
Either you fight the pirates and try to sell your music via the iTMS or you get a royalty payment and let your music be available for free.
I'm fed up with the *AAs trying to tell me that I owe them money. I don't. I go see the GOOD movies in theater (there's one coming out every eon or so, maybe you need to check that?) and when I want to watch something, well I have Blockbuster and NetFlix.
Music-wise? Most of the bands they produce suck, and I'd much rather go to a concert, and find the occasional song playing on a radio station than buy a CD or DRM files, because they just want a constant money stream. My wallet says no, and I live just fine without music. Ever walk outside without an iPod plugged into your ears? Sometimes a good hike without music does you good.
The *AAs are beyond a pain in the ass, they're thieving not just people, but businesses as well, and I sure hope that Apple takes them to court for diffamation on that one.
---- I am certain of only one thing : I know nothing else.
Microsoft knew it won't make wonders with the first iteration of their product. Much like with their other attempts at entering a new market, they sell at loss, taking experiments just to see the outcome and trying to damage the competition as much as possible.
Hence the "precedent" with Universal. I personally don't see how the deal with Zune obligates or pressures Apple into signing a deal as well.
Especially since iTunes is already a loss leader for them, hence they won't just agree Universal eating even more of their hardware profit for something as vague and abstract as "stolen music" tax. Apple isn't selling stolen music on their iPods. End of story.
You can expect Apple making few announcements about banning Universal from their store or something like that and that'd be the end of the story, if it even goes that far.
This is what happens when you dabble in both content and hardware. As they say, 'you sleep with dogs, you get fleas.' If Apple didn't have iTMS, they could more easily tell Universal to suck a fat dick.
In the end, this is just a negotiating ploy by Universal toward getting 1) a bigger cut of the pie, or 2) non-uniform pricing. This is the next logical step, and I'm sure they gave MS "friend" prices in exchange for being the first official hardware manufacturer to pay a pirate tax. Not much to see here...
So wasn't it in September that Steve Jobs got on a stage and pointed out that iTMS is now in the top five music sellers in the world? I.E. They were competing and gaining significantly on Walmart and such? And that they were the ONLY digital service that could claim this? I'm confused where these iPods with all this pirated music comes from if one of the top five music sellers in the world sells music that can only be listened to on iPods (and iTunes). Perhaps he would like to sue Apple and have to explain his logic to a judge?
Mike Scanlon
Doug Morris has said that he thinks all iPod owner's are thieves who owe him money but it isn't clear why he specifically thinks he's owed a dollar for every Zune--a dollar he'd make if he sold a little more than one song. He is not offering **anything** back to the end user--no indemnity, nothin'. Based on Doug Morris' guilty until proven innocent view of iPod owners, I don't see why he doesn't simply ask the police to arrest all iPod owners on sight or, at the very least, demand a list of all iPod owners from Apple so UMG can file lawsuits against all of them since they are all known thieves and that is the natural progression of Doug Morris' claims combined with the RIAA's sue anything that moves stance.
What seems likely is that Morris is demanding an approximation 3% tariff on the sales price like the 3% tariff the industry **already** receives from the sale of all recordable CDs marked "for music." As with Morris proposed "iPod" tax, the public receives nothing in return for music CD-R tax which was supposed to compensate the recording industry in return for not suing equipment manufacturers over Home Recording. As history shows, The Audio Home Recording Act did nothing to squelch the industries thirst for litigation, so there is no reason to think that giving in to an "iPod" tax will do anything along those lines.
If UMG wants to "tax" iPods, they need to give something up in return--like submitting to compulsory licensing for download as they have to for radio station playback and Jukeboxes.
They have this shit up in Canada for recordable media...but the Canadians seemed to have kept the cost and scope reasonable.
I have too easy a time imagining this 'fee' increasing every year, every time you buy a new music-related device.
So yeah...they pull this off and I will have ZERO ethical issues about copying every bit of music I can find. Greedy fucks.
Blar.
Imagine if they expect that tax to eventually maintain their current revenues, it's going to be a HUGE tax.
Copyright is what holds offer and demand in balance. Otherwise there is NO WAY to know what amount the tax should be. For example, would the tax be the same whether new music in a given year is good or crap? This is a path to hell.
This is like requiring shoppers at Walmart to pay a fee for stolen merchandise. That's only going to encourage further theft (gee, I already paid for it...it's not like I'm getting a five finger discount), and it's ridiculous from the start.
Wow, I had no idea that Microsoft cut that shady deal. Now the Universal seems to have quite literally declared they should have a right to both have their cake and eat it, too. They want you to both pay for the music and pay for not paying for it.
I don't own a media player, but now I know that if I ever get one, it won't be a Zune.
Does Microsoft's precedent mean the start of a slippery slope that will add a "pirate tax" to every piece of hardware that touches digital music?
Supply and demand applies here:
85% of all MP3 players are iPods.
After briefly debuting as the 7th most popular MP3 player, the Zune dropped to 13th most popular.
Universal gets three choices here:
Put up (only sell music through the Zune store as that is, let's face it, the only influence they have) and deal with only having the 13th most popular MP3 player market to go after... Not going to happen.
Shut up... Also not likely to happen.
Neither... They'll whine loudly, whilst sensibly not daring to cut their noses off to spite their faces, and occasionally create hype inducing headlines.
The previous MP3 taxes on hardware got through five plus years ago when MP3s were something weird the kids do. Passing laws to fine people who don't get a vote is really easy. In the half decade since, huge numbers of middle Americans have bought iPods and they're a part of mainstream society. The ignorance and "aren't l33t pirates bad!" claim doesn't work so well when middle American voters realize it suddenly applies to them and they'd be voting to make their toys more expensive.
So, Zune is such an embarassing joke it can hardly be called a trend setter, Universal won't dare actually boycot iTunes in order to make a point and MP3 players are so popular that the laws that got snuck through in the past now get soccer moms outraged. They can't affect it through business models or laws... Game over.
In much the same way, I want endless women. However, I control such a small part of the dating market that even if I boycot women, I doubt it'll bother them half as much as it'll bother me. I can't get a law passed that forces women to like me because it'd be political suicide for politicians. So, much like universal, that leaves me whining loudly about how things should be and yet nothing actually changing.
I've never heard of a company that produces tape or CD players having to give a percentage to the music industry? Why would an iPod be any different? You can just as easily pirate music with those devices.
I RTFA looking for this juicy little quote and couldn't find it anywhere. Am I blind or did the submitter make up a quote for Mr. Morris?
There's no way that what Doug Morris is suggesting would ever be fair. (well, what is in the record industry?...)
:(
Many people put indie label stuff on their iPods, and much other unclassifiable music, why should Universal get some $$ and not other labels?
What will happen at this point is anyone's guess, but I would consider that Apple's dominance of the market makes it such that it could fight back.
Otherwise there will be no end to this slippery slope. Warner Bros, Sony/BMG, EMI and all the others will claim the same.
Then it'll be the turn of major indies to hit Apple for a piece of the pie.
Therefore I pray that Steve Jobs and Apple's board of directors will have the sanity and foresight to resist what could be a very sad precedent
for the nascent digital music marketplace.
Just as in the SCO / Linux case, this may be a watermark moment, one that will help forever define our future with regards to recorded music.
Doug Morris is only projecting his own frustrations and those of his company's shareholders, and barely clinging to his job due to the lackluster corporate
earning results for the last 3 quarters at Universal certainly gives him far more motivation to do the saber-rattling act to show what a tough negotiator he is.
(well, that and what evil plotters Micro$oft are for pursuing what some call a 'scorched-earth' policy, so that if Zune fails, they'll make sure everyone else
fails, or at least truly suffers along with them...)
In the current picture of the digital marketplace today, Universal stands to lose out far more than Apple by refusing to renew the license on the existing terms.
Actually, if you retrace Doug Morris' steps and read some recent quotes, (and unless I am mistaken) he was also the most vociferous one behind the concept
that one-size-fits-all pricing had to end, and that his top-tier new artists should get more per download than his deep catalog titles.
Therefore, an interpretation of this would be that this is posturing well in advance of Apple's contract renewal to establish that he will not settle for 'One Price - One Rate',
which Apple has so far been steadfast about. This particular point appears to be one which Apple will have to concede to keep their rights to the Universal catalog,
and wil lead to an inevitable industry-wide restructuring of how downloads are priced.
All joking aside, I really could care less if J-Lo and Britney Spears' downloads jump to $1.49, that in itself is a bit of a joke, but an acceptable one...
Some days I do feel extremely ahsamed and embarrassed for still being a part of what's left of the record business, and likely to be summarily judged as being in
cahoots with the rest of the vultures....Today is just one of those days.
Z.
Well that was obviously Microsoft's plan: promise the Zune profits it doesn't yet have to Universal to in order to create a tax on all players, a tax that would be most expensive for the only company selling them: Apple. Microsoft can't compete on a level playing field.
Of course, today the playing field isn't tilting toward Microsoft; it has only manged to sell enough Zunes to eat into PlaysForSure players in week 1; it has since dropped off the charts.
Anyone who thinks Universal can pull its content out of the iTMS and be the victor is smoking crack. The iTunes Store isn't selling everyone their music; its only selling to a small segment regularly. Everyone else is buying CDs or using the iPod to listen to their own music. The iPod has no lock with iTunes Music, you can fill it any way you like.
The labels somehow think that consumers should repurchase their entire music library in electronic form, and when PlaysForSure stores and the iTunes Store didn't, they were puzzled. What is happening is that a small minority of people are paying for music in the iTunes Store, far more than are using any other online system (apart from piracy of course).
If Universal pulls out of the only system that works, it will be left to watch its sales slow down right when online sales through iTunes are the only growing market left for commercial music.
Apple can't afford to be too arrogant, but neither can Universal. Right now, Apple is handing Universal the vast majority of the profits it collects from iTunes sales. If Universal poisons the deal, they're only screwing themselves. The iPod and iTunes aren't going away, and the Zune isn't going to funnel any money to Universal at all.
In the big picture, Universal is desperate for sales, and iTunes is the only system offering something that works. Apple is building that into a movie business, too.
How Original Content Will Change Entertainment
Steve Jobs has connections in music, movies, and TV - how long before Apple begins commissioning original programming? Here's a look at the music, movie and TV business, and why Apple's involvement in each is far larger than the mainstream media seems to understand.
It's not apple's job to help the riaa and their artists recoup their losses due to piracy. That's like placing a tax on crowbars because people break into cars with them.
Why must people be so stupid?
I work for the Department of Redundancy Department.
Well, either Apple dumps Universal, calls their bluff, or sets a precedent for ALL of the labels to start doing this. Consumers aren't going to go for iPods where the price increases as a result, so it means cutting into Apple's profits. A buck an iPod lost translates to several million dollars per year. If each major label - even just the big four - start doing this, Apple could be looking at losses approaching $100m or more.
Honestly, I doubt that Universal would be dumb enough to cut off Apple if they refuse so I'm going to assume it's a bluff. And you can be fairly sure that if they are that moronic, there'd be an explanation in the next New Music Tuesday mailing about Universal calling every iPod owner a pirate, and how Apple defended them by not giving in to their piracy tax. When they come begging to get back into iTunes, Apple would probably negotiate a better profit for themselves in the process.
Of course, that's all speculation on my part, but I don't think Apple can really lose here unless they actually give in, in which case they're sure to. AFAIK, Microsoft made the offer to do this (though that could very well be wrong), and probably did so simply to try setting a precedent that works against Apple.
No matter how it works out, it means that I won't be buying Universal music ever again. If a piracy tax works its way into iPods, then it completely legitimizes it in my eyes (only for the labels receiving the tax, of course, not that the artists will see a cent of it). If Universal content gets pulled, I could care less as I won't buy music with DRM. And simply for the fact that they assume I'm a pirate, I'll ensure that I'm not supporting them in any way. As it is, I'd only buy indie albums since I won't fund the RIAA either, and moves like this are NOT persuading me otherwise.
How are sites slashdotted when nobody reads TFAs?
Re: The iPOD tax
I have purchased Apple products for years and I currently have 6 Macs in my house. I do not pirate (steal) music and in fact have bought a number of complete CDs from iTunes - as well as physical CDs from elsewhere. If you cave into the RIAA, I will take my business elsewhere.
ME
This message was brought to you by "Lack of Sleep."
..because that's exactly what happens. The Audio Home Recording Act of 1992 levied royalties on the sales of all digital recording devices and media, and Congress allocated a portion of the sales of audio cassette tapes to the RIAA back in the 80s. This is just the latest act in a long history of extortion.
The RIAA, via our so-called "free enterprise" system, has utterly disenfranchised at least 95% of all musicians. It's a fact in the U.S. that if you're a musician you are either grossly overpaid (les than 5% of us) or you have to keep a day job just to finance your real vocation. And God help you if your health won't sustain all that anymore, you simply have to give up performing.
As a musician in precisely that situation I am not merely justified in "pirating" content, it is my duty!
Fuck the RIAA -- Getcher download on!
I, for one, welcome this tax, but after paying it I'll fire up eMule AND BitTorrent and download 80GB of music, since I've already paid for my sins. See, you can't have it both ways. Either you don't charge this tax or I don't pay for music. It's that simple. For the record, my 4GB nano doesn't have a single illegal tune on it. I buy CDs and rip them into 192kbps VBR AAC files. Oh, and if Universal goes titsup tomorrow - I don't give a shit. I don't listen to any of their artists.
Essentially, yes. If you are buying a newer TV (or laptop, or video card, etc.) with HDMI, you are basically paying content companies for extra crap because it is assumed you will watch pirated material otherwise. Not exactly the same, but pretty damn close. You want to be able to watch anything at 1080p? You gotta pay up - even though your DVI connection can technically handle it just fine, you gotta pay the licensing fees to include HDMI - cause, you know, you can't be trusted just playing whatever source you want at full resolution.
No, you're constructing a straw man.
When Apple paid Creative, it was for the use of Creative's patents. I don't necessarily agree with the judgment, but that's what it was about. So you're right, that certainly doesn't give me any moral or ethical -- much less legal -- right to go out and steal stuff from Creative, at least not unless you espouse a somewhat extreme form of IP anarchism.
Anyway, the difference between that deal, and the Zune deal (or the Canadian 'media tax') is that Creative's deal with Apple doesn't make any comment about the actions of the users. It's purely between Apple and Creative. What Universal is saying in demanding its pound of flesh, is that users are criminals, and therefore the users should be made to pay for their criminal behavior, before they even do it. That's fundamentally different from a patent licensing deal.
In short, Universal is engaging in collective punishment -- trying to extort money from everyone who buys an Apple product, because they assume they will all be used for piracy. Since I'm going to get punished in that case either way, whether I pirate or not, then I might as well pirate.
"Ladies and gentlemen, my killbot features Lotus Notes and a machine gun. It is the finest available."
Well, it's not some intangible "something" in Canadian law that makes copying OK: when the canadian arm of the RIAA went and got the copyright law changed to get a "pirate tax", somebody in the system included explicitly the right for individuals to take copies of whatever music they wanted in the bill. The RIAA got screwed by the Parliament, and 15 years later The People get on with their lives without rackets.
Moreover, canadian privacy laws blocks the ISP's from giving away names, and the courts have rejected the bogus process the RIAA uses to get the courts to give them the names in the US.
I, for one, am building a shrine to the "unknown RIAA-tricker" every day I load up MP3's.
You're not old until regret takes the place of your dreams.
My iPod is used for audiobooks and mp3 of class lectures. Does this mean that Universal will owe me whatever pirate-fee they want on each iPod?
There are lies, damned lies, and statistics.
Any good parasite knows that its survival hinges on its not killing the host. Any record label that moves to cut its artists out of the loop has pronounced its own death sentence. I think it's called Hubris.
I am literally 3000 tokens away from the chaotic crossbow --Stephen
Have you read the source code to iTunes or the iPod firmware? If not, how can you be sure that Apple won't break your iPod at any time?
My other car is first.