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Universal Refuses To Renew On iTunes
UnknowingFool writes "It appears for the moment that Universal will not renew its long term contract with Apple for content on the iTunes store. While the details are not known about the exact nature of the dispute, many speculate that it has to do with Apple's stance on fixed pricing and Apple's refusal to license their DRM. The worse case scenario may include Universal pulling its entire catalog from iTunes. Both sides stand to lose out with 1/3 of of new releases coming from Universal and an estimated 15% of Universal's sales coming from digital downloads. Apple's market share is about 75% of digital downloads, and digital downloads are growing while CD sales are shrinking."
DRM free?
HAH. don't hold your breath... and it _will_ be more expensive than iTunes, and it _will_ be more DRM-crippling than iTunes.
Yeah, competition's great.
It's the Stay-Puft Marshmallow Man.
empty posturing. What does Universal lose by signing a short-term contract instead of a long-term one? Probably nothing. What do they gain? Marginally more credibility in the back-and-forth threats between Apple and the record companies. Wake me up when they explicitly threaten to cancel their contract and remove their media from iTunes if an express list of demands is not met. Until then, it means nothing. And even then, they'll likely return to the bargaining table before pulling the plug. Both sides know where their interests lie, and neither wants to pull the plug.
My long-term prediction? More of the status quo. Both sides are winning, and there is no external stimulus that seems like it might upset the equilibrium that has developed. Apple doesn't want to lose a third of its collection, and Universal doesn't want to be tied to the misfits and rejects that compose the rest of the playing field.
The most likely answer is that Universal, whose bean counters are not dumb enough to drop fully 15% of their sales to spite Apple, is simply making noises to negotiate a better deal.
The other possibility is that Bill Gates, in utter desperation because the Zune is such a piece of crap, has offered to pay Universal for exclusive content for the Zune. I would seriously not put it past Bill G and Steve B to do something like this. It would be a really bad day for Apple if this did happen, because it would make the Zune more popular and the iPod less popular.
Of course, it could backfire heavily against both Microsoft and Universal if Zune sales don't grow significantly.
Universal already has the option of going DRM-free with iTunes, and they haven't taken the bait. Anyway, they don't have an exclusive contract with iTunes. Your whole post makes no sense.
Username taken, please choose another one.
And yet you sell all your CD's at $16.99 regardless of that fact now, don't you?
At the same time, Mr. Jobs has refused the industry's calls for Apple to license its proprietary copy restriction software to other manufacturers. Music executives want the software to be shared so that services other than iTunes can sell music that can be played on the iPod, and so that other devices can play songs bought from iTunes.
Another load of crap. iPods can play music from any other DRM-free music seller. This joker wants you to believe iPods only play iTMS music, which is a lie. And iPod owners would likely buy music from other sources if: 1) It didn't have yet another, incompatible, version of DRM; 2) It was priced right; 3) It was the music they wanted to hear; 4) It had a nice interface to easily purchase and load said music onto their iPod. The record companies themselves are the ones to blame here.
You know, It's the DRM, stupid!
"It's the height of ridiculousness to say for those 9 lines you get hundreds of millions."
But some music executives have been chafing at the flat rate
Well, Universal, here's *my* new flat rate for any of your artists.
$0.00
I call it the Interwebs Discount.
Happy now?
And there isn't a damn thing you can do about it.
The problem with music DRM, from the music distributor perspective, is that it's too closely tied to player vendors. There's the iPod and the Zume, and in both cases the player manufacturer takes a cut of the revenue. UMG, reasonably enough, wants to cut the player manufacturer out of the revenue stream.
Microsoft has orphaned "PlaysForSure", which, for a while, looked like an option. Or at least Microsoft tried. WalMart went with PlaysForSure, and they might insist that Microsoft keep supporting it.
What really matters is what WalMart does. If the music industry doesn't come up with a good solution, Bentonville may dictate one. Their site currently says The Apple iPod and Microsoft Zune digital media players do not currently support protected WMA-format files, and will not play Wal-Mart Music Downloads. Walmart.com has a large selection of WMA-/DRM-compatible digital music players available at great prices.
WalMart, remember, sells online music at $0.88/song, below Apple and Microsoft. And they're not going to raise their prices.
Not to mention, Universal wants money from each iPod sold, just like they get from the Zune, (and they've been asking for that since before the Zune deal was announced). For some reason, they think that they deserve that, even though they didn't design the electronics, or the UI, and iPods are not sold with any Universal Music on them, and don't in any way require Universal Music to function correctly.
MS need to give money to people just to jump on their bandwagon, because the service wasn't popular, and they needed to give the labels a reason to join their service. iTunes on the other hand is extremely popular, and doesn't need to make stupid deals like giving away a percentage of iPod profits to music companies. Universal is already getting a percentage of the music sales they get from iTunes, and that is all they should get.
Anthropic principle: We see the universe the way it is because if it were different we would not be here to see it.
No. Look where people go for their downloads. Especially, look at which store people buy DRM'ed tracks from.
If they want to keep the DRM, good look trying to sell it on anything other than iTunes with Fairplay. They'd be excluding themselves from the biggest market.
If they're prepared to sell DRM-free, and want more than Apple's $1.29, they're screwed too, cause customers don't like being fucked by price hikes.
The fact is that by breaking their relations with the biggest distributor of downloadable music, they're only screwing themselves.