Slashdot Mirror

← Back to Stories (view on slashdot.org)

Vivendi Calls iTunes Contract Terms "Indecent"

Posted by ScuttleMonkey on from the better-business-through-greed dept.

Bemopolis writes "Brace yourselves for a shocking revelation: The CEO of Vivendi, parent company of UMG, is not happy with the current deal with the iTunes Store. 'The split between Apple and (music) producers is indecent [...] Our contracts give too good a share to Apple.' The usual argument about older music priced at the same rate as new music is trotted out. No doubt UMG would prefer to make the former cheaper, while maintaining the current pricing for the latter. At least he had the decency not to claim that they were trying to defend their artists against predatory iTunes pricing. Or maybe he just misplaced the index card with that boilerplate on it."

10 of 288 comments (clear)

  1. Incompetance or greed? by Anonymous Coward · · Score: 5, Insightful

    Silly question, but if the contract terms are unfair to UMG, then why the hell did they agree to them ?

  2. I don't get it... by maccam · · Score: 5, Funny

    ...how can a company (UMG) that gets money for nothing be in such dire straits?

    --
    Half Word - Will Double, Wire Palindrome, San Francisco
    1. Re:I don't get it... by _Quinn · · Score: 5, Funny

      Turns out that chicks aren't free.

      --
      Reality Maintenance Group, Silver City Construction Co., Ltd.
    2. Re:I don't get it... by Anonymous Coward · · Score: 5, Funny

      Because of Steve Jobs. The Man's Too Strong and refuses to be Brothers in Arms to screw consumers. Once Upon a Time in the West, the music industry made money by controlling the distribution, but the Internet makes it One World and people from all Walk of Life can easily download songs for free. Jobs became the Angel of Mercy by opening iTunes Store and converting file sharer into paying customers. He asked the executives "Where Do You Think You're Going? Your Latest Trick doesn't work with the consumers anymore. You and Your Friend must offer music at a compelling price and a reasonable DRM." But the greedy executives issued a Communique calling consumers and iPod owners pirates and thieves. They prefer screwing consumers in their Tunnel of Love and stabbing iTunes in the back with a Six Blade Knife to making honest bucks.

      That's how!

  3. Re:Waa, waa.... by larien · · Score: 5, Insightful
    Crap, just re-read what I typed; forgot to escape the "less than". Supposed to read:

    So they get 70 Euro cents for every song for zero marginal cost. They get over 70% of the sale price, leaving the remaining <30% to cover costs plus a profit for Apple.

    At least on a physical CD, they had the excuse of printing, transit, etc, etc to cover, but with this they just get a cheque every month for sitting on their backsides and doing sod all.

  4. 71/29 split indecent? by frdmfghtr · · Score: 5, Insightful
    FTA:

    At present, UMG, the world's largest record company, gets 0.70 euro ($0.99) out of the 0.99 euro retail price charged by iTunes, Vivendi said.
    My math puts that at 71% for UMG, 29% Apple.

    I'm split on this one:

    (1) If you think of it in terms of traditional retail, Apple is applying a 41% (.29 retail/.70 wholesale) markup. That sounds like a hefty markup at first, until you figure in Apple's cost of storage and delivery. While there is no "storage" and "delivery" in the traditional brick and mortar store sense, there is still server storage and bandwidth costs. I wonder what Apple's true costs (costs to music producers and IT costs to run iTMS) are on a per-track basis. Know that, and you can get a better grasp on the actual profit margin.

    (2) If the deal is so bad for the producers, why did they go in on the deal in the first place?

    The second point is more rhetorical, but the first one I think bears further study before deciding if the markup is excessive. Of course, getting Apple's per-track expenses will be damn near impossible so we'll have to settle for speculation and conjecture. :)
    --
    Government's idea of a balanced budget: take money from the right pocket to balance...oh who am I kidding?
  5. Pot Kettle Black? by EasyT · · Score: 5, Funny
    Having a music label (or CEO of a company that owns said music label) complain that someone else's contract terms are indecent is hilarious. It's like a nudist calling someone else underdressed.

    This is the most entertaining news I've read all day! Thank you, submitter.

  6. Indecent by whisper_jeff · · Score: 5, Insightful

    I'd love to see how much of that 70% makes its way to the artists. Perhaps Vivendi misunderstood where the "indecent" portion of the financial split exists...

  7. Re:Not quite right, I think by yo_tuco · · Score: 5, Insightful

    "UMG is pissed..."

    Maybe because now they know how the artist's feel when the middle man gouges you.

  8. Actually... by Newer+Guy · · Score: 5, Interesting
    The artist gets 7 cents of every song sold-it comes out of Apple's 'cut'.

    The credit card companies get 7 cents out of every song sold-it comes out of Apple's 'cut'.

    Apple gets 15 cents out of every song sold and out of that they have to pay for bandwidth, web design and 1001 other things. Apple gets the smallest 'cut' of all. They claim they only break even on iTunes; that it exists to benefit the iPod-which is their big cash cow. Of course the record companies are ALSO botching abiut that-they want a 'cut' on every iPod sold!

    Greedy bastards!