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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.
God, I hope they do this. Because if I have to pay a Pirate Tax, then doesn't that mean I can pirate all the Universal Stuff I want... since I've already paid the tax?
The real Sig captains the Northwestern. This one captains
IIRC Canada has a system like this, where part of the purchase price of blank media goes to royalties for stuff that is assumed to be copied to it.
If they charged a fee for each device and let us have free, legal file sharing (since we paid for the content with our device fee) it sounds semi reasonable.
Of course that's not what they are talking about so...
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.
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
"These devices are just repositories for stolen music, and they all know it,. So it's time to get paid for it."
Riiiight. So umm... despite the fact that there's absolutely zero proof, a general assumption is being made... which spreads to ALL digital-music listeners... and say that they want money.
So... going by this theory, cable companies should charge everyone who watches TV because they all steal satellite signals?
YES! Everyone on earth is a digital thief, so let's make a profit off of it!
Planet Zebeth - Metroid with a twist
I think Mr. Morris should be modded down for his obviously riotous and hateful flamebait of a statement.
What kind of environment do you have to be raised in that instills a sense of entitlement so absolute that it reduces onlookers to standing agape in stunned silence?
These people need to be kept away from sharp objects and heavy machinery until they grow up.
Schwab
Editor, A1-AAA AmeriCaptions
Doug Morris: Steve, I think we should get $1 for every iPod you sell.
Steve Jobs: No.
Doug Morris: We asked Microsoft for $1 for each Zune sold, and they said "Yes".
Steve Jobs: They were desperate. We're not. By the way, how has the Zune deal been working out for you?
Doug Morris: So far, we've gotten $52.
Hey, what did the American Institute of Aeronautics and Astronautics ever do to you? (ducks)
make world, not war
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.
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.
If they are going to legalize piracy, I can see them putting "pirate taxes" to a lot more things...
"ADSL modems! They all know they are being used to download illegal mp3s (well, and porn)"
"Monitors! Everybody knows people use them to find songs to download illegally"
"Mice! Everyone knows that they are mainly used to download songs illegally"
"And don't even get me started on chairs, food and houses. They are only being used to maintain themselves so they can download more music!"
The record industry is interesting. It is so powerful, that it can make change and introduce new products and formats (like CD), yet ultimately it has a product that people can do without.
And they are 'doing without' in droves. People are buying Wiis and DVDs and getting cable TV and video off YouTube. They are loosing market share and blaming piracy. Blaming the unnameable is truly the last bastion of an industry that is dying. It means that, at AGMs, the directors will have an excuse for bad
profitability, when inaction is their only excuse. If you hold shares in a large music company, time to ask them what product they plan on releasing when they have become irrelevant due to their inaction.
Years ago, they could have made a cheap, effective, simple service. Instead - everyone copied music, found what they like and bought CDs because they felt like they should support the artist. Record sales went up. Then Napster got a sued, Audiogalaxy got shutdown, and the punters should no longer try before they buy.
RIAA continues to sue... people continue not to buy.
It's time to wake up record companies. It's not too difficult. iTunes will save your ass. If you leave it 2 more years - iTunes will own you ass. You will have to bend over and lick Apple's boots. Do you realise that you are 1 freakin step away from having someone like Apple set up a service to post produce 100000 punters Garage Band files and then release them? The only thing you have is radio stations who you collaborate with. The advertising revenues for these are not going too well. Do you feel you owe it to them to ensure they join you in a symbiotic slide into oblivion?
I have bought my last 2 years worth of music though iTunes. I don't need a CD. I don't need all
the wasted plastic and paper. I don't need to waste resources to have music. I don't need the stores,
the transport, the manufacturers. Sound only needs to be touched and felt in 1 way - through bass
pounding in your chest... not through yet another breaking CD container.
In my next incarnation, I hope to come back as a code monkey.
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?
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.
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?
This is like requiring shoppers at Walmart to pay a fee for stolen merchandise.
Uh, shoppers do pay for stolen merchandise. It is part of the retail markup. Like returns and warranty work, the accountants probably have an account for losses due to theft, a percentage of sales based on historical averages goes into the account, actual losses are charged against the account, and there are probably tax deductions. So shoplifters are not stealing from the CEOs pockets, they are stealing from the taxpayers who partially subsidize the losses via tax deductions and the shoppers who pay slightly inflated prices.
The quote is not from the article but something Doug Morris has been quoted as saying.
It seems to have come from a Nov 10 Billboard piece:s p?vnu_content_id=1003380831
http://billboard.com/bbcom/news/article_display.j
"Looking good Vern."
Other possible RIAA plants (this story only):
- #17043086 (User: Man in Spandex)
- #17043272 (User: LO0G)
- #17042814 (User: seriv)
- #17043858 (User: j-beda)
- #17043038 (User: Jerry Rivers)
- #17043474, #17043550 (User: pandrijeczko)
On a side note, the quote in the summary, "These devices are just repositories for stolen music, and they all know it,. So it's time to get paid for it," is not from the Reuters press release. It originally appeared in the Billboard article announcing the Zune launch, and was discussed on slashdot.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."
Being Canadian and all, I have read about this law for the "media tax" and so on, basically they compared downloading music to going to the library and making a photocopy of a book or its pages and so on. But what they explicitly said was wrong was "advertising" your shares. Or basically saying openly "Hey I have music, come download from me!". That is illegal.
So basically, you can download but you can't share.
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.