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Universal Refuses To Renew On iTunes 287

Posted by ScuttleMonkey
from the don't-be-greedy dept.
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."
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Universal Refuses To Renew On iTunes

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  • Worst case? (Score:2, Interesting)

    The worse case scenario may include Universal pulling its entire catalog from iTunes.
    How exactly is this the "worse case" scenario? I'd like to see Universal sign with someone else (hopefully a non-exclusive, DRM-free deal.) Competition is always a good thing.
    • Re:Worst case? (Score:5, Insightful)

      by Doctor_Jest (688315) * on Monday July 02, 2007 @02:34PM (#19720283)
      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.

      • Re: (Score:2, Insightful)

        Yes. If they go and sleep with somebody else, they are going to suck. "It will suck." "It will not work".

        I see this as definitely a good thing.

        BTW, Magnatune with Amarok is far better deal then iTunes. Just in case somebody is interested.

        But do not let me spoil the party - let Apple whoring begin.
        • No doubt. And since I don't buy any Universal artists, I really don't care if they disappear....

          I'd also like to add ambient.us too... (with props to eMusic if you are into subscriptions... but they're crippleware-free!)

        • Re:Worst case? (Score:4, Insightful)

          by acvh (120205) <geek AT mscigars DOT com> on Monday July 02, 2007 @02:59PM (#19720599) Homepage
          "BTW, Magnatune with Amarok is far better deal then iTunes. Just in case somebody is interested. "

          There IS the issue of just how large their respective inventories are: I believe iTunes wins there.

          Hey, there are many sources of cheap, independent music. I use them. I like them. But to say that 500 albums at 5 bucks each represents "a far better deal" requires some suspension of reality.
      • Re: (Score:3, Insightful)

        by twitchingbug (701187)
        Guess who wins? EMI.

        If Universal thinks that people will buy from another online source than iTunes, let them try. That's competition. EMI felt differently, and will win and grab a larger market share. Honestly I've never paid any attention to which labels musicians signed with before. But now it'll becoming blindingly obvious who's in what camp.
        • Re: (Score:2, Insightful)

          by gowen (141411)
          Dude, until recently anyone with a non-Apple mp3 player couldn't use iTunes without jumping through ridiculous hoops. Given how cheap commodity flash mp3 players have become, why would any company opt to cut themselves out of that market.

          iTunes have established a download market. They've served their purpose and are now surplus to Universal's requirements.
          • Re:Worst case? (Score:5, Insightful)

            by LordVader717 (888547) on Monday July 02, 2007 @03:30PM (#19720961)
            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.
          • Re: (Score:3, Interesting)

            by Altus (1034)

            Universal is going to demand DRM with their new provider. They will be cutting themselves out of that market (which I doubt is actually a huge consumer of online music since those players probably contain mostly ripped CDs, but that is besides the point) no matter what.

            They just want more money and they dont want to give up DRM to get it. If they went somewhere else and sold their music DRM free I would probably buy it (assuming they have anything I want) but if its got some other DRM I wont buy it, becaus
          • by NDPTAL85 (260093)
            "why would any company opt to cut themselves out of that market."

            Because the iPod is over 78% of the DAP market thats why.
    • Re:Worst case? (Score:5, Insightful)

      by anotherone (132088) on Monday July 02, 2007 @02:38PM (#19720325)
      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.
    • Uhh... Universal has deals with others. This doesn't change that. This makes LESS options, not more. It certainly isn't a positive for DRM-free music, where iTunes leads the charge, as far as major labels go, since signing the EMI deal. Universal definitely wants DRM.

      Universal wants to be able to up prices where it thinks it can get more money. Apple isn't letting them do that. How do you see it as a positive that they're going to go to someone who does?
    • Any Universal shareholder out there? I have looked for music a few times on the iTunes store recently. Some of it has been there, but not on iTunes Plus, and so I have not bought it. The only music I will buy is DRM-free, either on CD or from iTunes Plus. Typically, I am too lazy to buy CDs, which means most music I buy is from iTunes Plus. I've bought more music since it launched than in the six months prior. Aren't companies legally obliged to try to maximise profits? I seem to recall this being us
      • by catbutt (469582)

        Aren't companies legally obliged to try to maximise profits? I seem to recall this being used to justify bad behaviour, why isn't it used for good behaviour?

        Well, I don't know if that is true really...sure they have a long term obligation to shareholders, but in the case of bad behaviour, choosing the "bad" route may lessen profits in the long term if it harms their reputation.

        As for your "good behaviour" scenario...well, you haven't exactly offered proof that going DRM free will maximize their profits, except with regard to your purchases specifically. Not every music consumer happens to be a slashdot-reading anti-DRM advocate who makes purchasing decision

        • Re: (Score:2, Interesting)

          by c_woolley (905087)
          Correct, and also, it is up to the company's board to decide what they believe will have a financial impact to "maximize" profits. That company may decide (hopefully) that fair business and good PR will win customers. Apple took this stance when they told the recording industry they would not hike the prices of their music downloads. They never stated that they didn't like the idea of more money coming in, but it did rally a lot of customers who bordered the fence to either stay with Apple, or go to Appl
      • by CastrTroy (595695)
        I've bought more music (and spent more money) on eMusic in the last 6 months than I did in the previous 5 years before I was on eMusic. No song is worth 99 cents. I don't care if the Pope is singing it. Bring down the prices, especially on the digital downloads, and you'll have tons more people buying the music. Differentiate CDs and digital downloads on price, any you'll see people stop downloading them illegally.
      • maximise profits?

        No. Companies, whether corporations, proprietorships, or partnerships, have the responsibility to do what the owners want as long as it doesn't break the law. In the case of partnerships and proprietorships it's usually the owner(s) who run the business. Corporations on the other hand have the responsibility to fulfill the requirements of the charter the corporation has been given as well. And since the first corporate charters were granted, to amoung others the Dutch East India Com [wikipedia.org]

    • Re:Worst case? (Score:4, Informative)

      by Drawkcab (550036) on Monday July 02, 2007 @02:41PM (#19720377)
      iTunes isn't the one pushing DRM, its the record labels like Universal who insist on it. Apple knows its customers don't like DRM and they'd sell more without it, but the copyright holders are the ones worried about losing revenue in the long term without DRM. You've got it completely confused.
      • Re: (Score:3, Interesting)

        by CastrTroy (595695)
        I really don't understand this. Almost all the CDs sold in the last 20 years had no form of DRM. And they weren't scared then. What all of a sudden makes them want to sell everything. If they'd focus more on making quality music, and delivering it at a fair price, then they wouldn't have problems with people pirating music.
        • Re:Worst case? (Score:5, Insightful)

          by cayenne8 (626475) on Monday July 02, 2007 @04:31PM (#19721699) Homepage Journal
          "I really don't understand this. Almost all the CDs sold in the last 20 years had no form of DRM. And they weren't scared then."

          Well, remember back when CD's came out...there really was no way to rip them...hell, not many people had a harddrive big enough to hold all a CD's data. At that time, a CD was a safe, one use medium...you could record off it to cassette, but, that was lossy and they didn't care that much about it.

          Then...came larger harddrives, cd burners and cd drives on computers...and compression techs (mp3, etc). Well, what was once 'secure' to do consumer's hardware limitations, wasn't any more.

          The music companies hate that...and with digital music and DRM, are trying to close that hole. They'd fix the CD's to be read only if there were only some way they could...trust me. They're gonna be happy to get rid of CD's if ONLY they can lock the users down in a way they screwed up on and didn't do with CD's.

          They do not want to repeat the non-DRM mistakes they made with CD's.

    • I'd like to see Universal sign with ... hopefully a ... DRM-free deal.

      Uh, that would be Apple, sport. Jobs is the one publically urging the labels to drop DRM.

    • I'd like to see Universal sign with someone else (hopefully a non-exclusive, DRM-free deal.)
      If wishes were horses we'd all be eating steak right now.
    • by TeknoHog (164938)
      It's the "worse case" as the /. story pointed out, but not the worst :D
  • Universal? (Score:3, Insightful)

    by Karganeth (1017580) on Monday July 02, 2007 @02:36PM (#19720301)
    Aren't they also the only company exclusively backing the doomed HD-DVD format? Stupid businesses make stupid decisions.
    • Re:Universal? (Score:4, Interesting)

      by illegalcortex (1007791) on Monday July 02, 2007 @03:21PM (#19720837)
      Wiki says HD-DVD is exclusively backed by The Weinstein Company/Dimension Films (through Genius Products), and First Look Studios. A number of Warner's releases have been HD-DVD only. And then there are the non-content companies who are exclusively backing HD-DVD: Toshiba, NEC, Sanyo, Microsoft, RCA, Kenwood, Intel, and Memory-Tech Corporation.

      Personally, I think it's a bit early to be deciding who is doomed and who isn't. I think it's just as likely that both formats are doomed and there will be a "winner" only in the same way that laserdisc "won" the battle to be the next video medium after VHS. It was the format to use, there were just a low percentage of people interested in it.
      • Re: (Score:3, Informative)

        by sl3xd (111641) *
        There are a lot of PS3 fanboys who play up Blu-ray, since that's about all the PS3 can do with the current PS3 game selection. Since the PS3 is generally being outsold by the Wii, 360, and PS2, making premature claims about the one thing that seems to be going the PS3's way (ie. Blu ray is doing well) seems to be a major outlet for fanboys who can't seem to grasp that the PS3 isn't going to dominate the market the way the PS2 did.

        In terms of standalone Blu-ray vs HD DVD player sales, HD DVD has a wide lead
  • by Pendersempai (625351) on Monday July 02, 2007 @02:36PM (#19720309)
    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.
    • by TubeSteak (669689) on Monday July 02, 2007 @03:26PM (#19720901) Journal

      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.
      When heavy hitters engage in diplomacy, they usually make lots of small incremental steps.

      It isn't enough to show Apple that they're serious, they want the rest of the industry to see that these steps can be taken without ruining their business. The ultimate goal is to restructure Apple's relationship with the entire music industry, not just with Universal.

      If you see this as just an empty threat, then you aren't looking very far down the road.
    • I'd love to see Steve bag the month-to-month and pull the plug on Universal. It would be a serious high-stakes poker move. Then again, I guess that's why I ain't CEO of Apple/Pixar/NeXT/whatever...

  • by theolein (316044) on Monday July 02, 2007 @02:37PM (#19720311) Journal
    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.
    • by russotto (537200) on Monday July 02, 2007 @02:42PM (#19720385) Journal
      Apple, on the other hand, probably IS willing to drop Universal's catalog from iTunes if Universal gets unreasonable. Which is the more likely thought process?

      1) Oh, Universal's music is no longer available on iTunes. I'll buy this piece of crap Zune instead of the cool new iPod Femto

      or

      2) Oh, Universal's music is no longer available on iTunes. I'll have to <strike>pirate it like there's no tommorrow</strike> rip it from CD onto my iPod

      • Re: (Score:3, Interesting)

        The third possibility of course is that Universal could do an EMI & go down the DRM free path - selling iPod compatible mp4s/mp4s on amazon / whatever.

        I think that's a reasonable bargaining chip to bring to the table - imagine the launch of ipod compatible, variable priced music on Amazon - launched with a live concert by universal artists such as U2 & Elton John....
      • by Phroggy (441) <slashdot3&phroggy,com> on Tuesday July 03, 2007 @04:02AM (#19727739) Homepage

        1) Oh, Universal's music is no longer available on iTunes. I'll buy this piece of crap Zune instead of the cool new iPod Femto

        or

        2) Oh, Universal's music is no longer available on iTunes. I'll have to <strike>pirate it like there's no tommorrow</strike> rip it from CD onto my iPod
        or

        3) Oh, Universal's music is no longer available on iTunes. Hey, here's a cool song on iTunes, from some other label, I was thinking about getting this one too, I guess I'll just buy it instead. I don't really need that other song I wanted.

        or

        4) Universal conspires with two or three other big labels to also drop iTunes if their collective demands aren't met. Apple accuses the labels of forming a dangerous anti-consumer cartel, while the labels accuse Apple of being a dangerous anti-consumer monopoly, and because the labels have deeper pockets and are much more experienced at spreading ridiculous lies and deceit, few people hear Apple's side.

        or, as another poster pointed out,

        5) Universal sets up an iTMS competitor selling DRM-free tracks; they offer an introductory price of $0.89/track for the first three months, then jack it up to $1.99 per track for the tracks more than a handful of people want, while still offering crap nobody likes for $0.89/track (which is the price they'll advertise, of course). Throw billions of dollars at promoting it, and they'll convince some people to switch away from iTMS.
    • Re: (Score:2, Insightful)

      by BryanL (93656)
      With ipod's installed user base and looking at life before the iTunes store, it might mean more CD sales and going back to ripping from CDs to get the music on an iPod. Or it could mean more P2P downloading of Universals music (I.E. pirating). Exclusive deals for the Zune are not necessarily in Universals best interest nor will it necessarily hurt Apple.
    • by Locutus (9039)
      also remember that Universal is backing HD-DVD which is also a Microsoft supported video format...

      It looks like Universal is a full fledged 'partner' of Microsoft in both music and video and they are drawing the line in the sand with regards to other partners because of their deals with Microsoft.

      LoB
    • by JimDaGeek (983925)
      How would Zune-exclusive songs make the Zune more popular? People don't like the Zune. It is ugly and has MS-Only DRM.

      If people cannot buy what they want, they will find other ways. More than 100 million iPods have been sold and more are still going out the door every day. Do you think all those users will just drop the iPod and buy a Zune? If they wanted a Zune, they would not have gotten an iPod. So having MS Zune-only stuff that people want will just make people either go and and buy and rip a C
  • by EricTheGreen (223110) on Monday July 02, 2007 @02:37PM (#19720323) Homepage
    Unsigned Band with break-out potential: "So, we sign with you...and our record won't be up for sale on iTunes?"
    Universal A/R dude/dudette: "Yep, that's right."
    Unsigned Band with break-out potential: "So any unit sales revenue we see from you will be from Wal-Mart and Best Buy sales, nothing else?"
    Universal A/R dude/dudette: "Uh huh."
    Unsigned Band with break-out potential: "Losers. Next!"
    • by badasscat (563442) <basscadet75&yahoo,com> on Monday July 02, 2007 @02:48PM (#19720457)
      Unsigned Band with break-out potential: "So, we sign with you...and our record won't be up for sale on iTunes?"

      You're assuming major labels are still out there trolling nightclubs for "unsigned bands with break-out potential".

      More often what they're doing is hitting up their local malls and "recruiting" teenage girls (or in the case of boy bands, teenage boys) to actively "break" as the next pop star. These girls and guys had nothing going for them (except cheerleader looks) before, so why would they turn down the promise of riches just because the songs some producer wrote for them to lay their heavily processed vocals over won't be on iTunes? If they do, hey, there's plenty more at the mall they came from.
      • Re: (Score:3, Insightful)

        by EricTheGreen (223110)
        Oh, they're still trolling the bars, absolutely, and that won't change anytime soon. What the greenlighting people _are_ doing differently now, for certain, is closely qualifying what "breakout" means to them, in terms of risk of the act. As many others have noted, it's a lot harder these days to get signed and nobody, no one, is given any development runway anymore--disc #1 needs to sell {x} units minimum or your toast. It's a sad loss all the way around.

        To your point...the recruiting/packaging you ment
      • Re: (Score:3, Informative)

        I don't think that's been true since the 90's. Or, ever. Some top-selling artists are bands that came to fame as bands, some are solo acts that split off from groups, and a very few are people with previous experience in the entertainment industry being developed--but the specific formula you're describing is an exaggeration that never even applied to the worst of the pop acts from the late 90's.
    • Re: (Score:3, Insightful)

      by morari (1080535)
      Unsigned Band with break-out potential: "So you'll bring in your own producer and mixer to push our style more toward what you think people want to hear?"

      Universal A/R dude/dudette: "Yep, that's right!"

      Unsigned Band with break-out potential: "We'll loose all creative control and have next to no say in what we put out, but we're guaranteed to have at least one initial single because you own all media outlets like radio stations, television and most stores?"

      Universal A/R dude/dudette: "Uh huh."

      Unsigne

      • Seems you've read the Albini essay as well.... {grin} True, if you're desperate enough to be "broken", the labels can play you in precisely the way you write.

        I do think more unsigned acts are becoming savvier in general these days regarding the mechanics of their business. If nothing else, they're certainly aware that there's more than one label in town to ply their services to. My point was Universal would just be putting themselves at a disadvantage with this, compared to their competition. And all it
        • by ePhil_One (634771)
          I don't really get what benefit they'd realize from pulling out, unless this is just a negotiating tactic (which certainly could be the case.) Even then, though, iTunes is probably approaching a scale at which they could weather the loss of revenue (albeit with difficulty)

          This is definately a negotiating tactic, but its almost certain to backfire on them. When I decide to buy a song these days, unless its for some group I definately want several songs from, I automatically go to iTunes (even before I had

    • by stuntpope (19736)
      Unsigned band who sees their first major-label contract as their shot at the big time and all their dreams come true: "Where do we sign? We brought our peeeens!"
    • by Overzeetop (214511) on Monday July 02, 2007 @03:02PM (#19720649) Journal
      Unsigned Band with break-out potential: "So any unit sales revenue we see from you will be from Wal-Mart and Best Buy sales, nothing else?"

      Universal A/R dude/dudette: "No, of course not. You will never see sales revenue because we will cook the books so that you never see a penny. But you are othewise correct - the unit sales revenue you will never see will only come from Wal-Mart and Best Buy."

      Unsigned Band with break-out potential: "Where do we sign?"
      • by jfengel (409917)
        You forgot the intermediate step:

        A/R dude/dudette: But we will put your face in every record store in America and play an overproduced, bland version of music on six radio stations in every market 19 times a day. You'll be completely broke but you'll get laid a lot.

        Unsigned Band: "Sold American!"
    • by elrous0 (869638) *
      You forgot the ending:

      Universal A/R dude/dudette: "Oh well, we were going to give you this big check and this mansion we rented for you, but if you just want to go back to your grungy nightclub and living in your van, go right ahead."
      Unsigned Band with break-out potential: "Should we spit or swallow?"

    • by Lumpy (12016)
      Correction on your above conversation.

      What you want to sign us??? AWESOME!!!!! where do we sign??

      Bands dont bother to read the contract. Most get pissy after they discover that the record company is screwing them hard and they actually owe them several million after their record goes platinum.

      BAND: what do you mena we're broke?
      RECORD EXEC: you are out of money and because you are not writing a new album we are cutting off your credit line.
      BAND: that's not fair! we want out!
      RECORD EXEC: no problem, just ab
    • Any unsigned band would be better off going straight to the Internet. Record companies can't do any more these days than an independent record producer in terms of recording quality, and since the cost of distribution is essentially nil, the only thing they'd be getting from a "normal" record company is promotion and songwriters. And if they don't mind doing their own promotion and write their own songs, this isn't a problem.

      Case in point: Jonathan Coulton. He has said he makes as much as a signed band lik

    • Wal-Mart and Best Buy do not stock up-and-coming or "breaking" bands.

      They stock the Top 40. And Country. That's it. I've actually come to appreciate my local independent record store, and started shopping there a few months ago, after a few years hiatus. They treat you well, and usually throw in a free poster or sampler if you spend more than ten bucks.
  • Universal (unlike many other vendors) probably recognizes the market for non-DRM music is huge while at the same time DRM sales are widely being rebelled against. While there is still room for the debate to be resolved, hopefully it's a further push away from DRM.
  • by sehlat (180760) on Monday July 02, 2007 @02:38PM (#19720331)
    Let's see: Universal is unhappy with Jobs' position on pricing and want to have their OWN Digital-Consumer-Disablement crippled service with higher prices than Apple and, since Apple won't license the DCD, it will have to be incompatible with the iPod, which is as close to a player monopoly as you can get without the Feds landing on you with an army of antitrust lawyers.

    They think this is good for them HOW?
    • by Cadallin (863437) on Monday July 02, 2007 @02:47PM (#19720455)
      Hold on, Hold on. The iPod is NOT a prosecutable monopoly. It's a natural Monopoly. Which is to say, it arises because that just what consumers are buying. There is not illegal about that at all. It is 100% legit. It is only illegal to use a monopoly in one area to force a monopoly in another. Like Microsoft using their Monopoly in Operating Systems to shut Corel out of the market for Office Suites. Like Microsoft using their Monopolies in Operating Systems and Office Suites to secure a Monopoly in the Browser Market. That's illegal. iPod/iTunes is not, despite complaints by overzealous European prosecutors. There are LOTS of (legal even) ways to get music onto an iPod. Buying CDs for one. Plenty of Musicians are distributing music themselves in MP3 or FLAC (which can't be played on an iPod Shame on you Apple! But FLAC can be converted to other formats that can be played on an iPod). iTunes Music Store "Lock-in" in pretty poor to be honest. The vast majority of iPod users are not filling up their iPods on ITMS purchases.
      • by mean pun (717227)

        Hold on, Hold on. The iPod is NOT a prosecutable monopoly. [Snipped Microsoft examples] That's illegal. iPod/iTunes is not, despite complaints by overzealous European prosecutors.

        But those European prosecutors are upholding the laws of their own country, not US law. It is quite possible that what is legal in the US is illegal in the country of those `overzealous prosecutors'.

      • by jimicus (737525)
        How the iPod became the dominant MP3 player isn't really the point.

        The point is, Universal want an alternative online market, they don't like the one provided by iTunes. Unless they're prepared to drop DRM as a requirement and have whoever sells their music sell it as straight unencumbered MP3s (or something else the iPod can easily be persuaded to play), they're essentially cutting off online sales from most of the portable MP3 players out there. Why?

        FWIW, I wouldn't be surprised if they are trolling f
  • I don't really see this as a big deal for Apple. They're [allegedly] not making much money off of music sales on iTunes. It may help bolster the popularity of the service, but does anyone really believe that all of the existing iPod owners are going to abandon ship should Universal decide to pull out completely?

    There are two likely scenarios should Vivendi/Universal drop iTunes:

    1) They switch to a competing DRM format with no compatibility with iPods: Users download content from peer-to-peer services / ri
  • Load of Hooey (Score:5, Insightful)

    by Nom du Keyboard (633989) on Monday July 02, 2007 @02:48PM (#19720469)
    Edgar Bronfman Jr., the chairman of Warner Music Group, reinforced that idea at a recent investor conference, saying "we believe that not every song, not every artist, not every album, is created equal."

    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!

    • Edgar Bronfman Jr., the chairman of Warner Music Group, reinforced that idea at a recent investor conference, saying "we believe that not every song, not every artist, not every album, is created equal."

      And yet you sell all your CD's at $16.99 regardless of that fact now, don't you?


      I see no inconsistency: their CDs have JUUUUUUUUUUUUUUUUST the right mix of crap and non-crap to make the calc come out to...$16.99 :-)

  • by MikeRT (947531) on Monday July 02, 2007 @02:51PM (#19720507) Homepage
    Losing 15% of your income is a lot of money when you are that big. That's about the point that shareholders want to hear about cost-cutting measures to regain what they have lost--namely downsizing and such. For Apple, it would be a blow, but it would also not be nearly as bad because they still have so many content providers to work with.

    If Apple and Universal cannot come to an agreement, Apple should bide its time, wait for them to weaken and strike. Buy out their catalog for a cool few billion dollars in cash and license it exclusively through the ITMS.
    • You're right. Who would have ever thought we'd see the day when in this balance an electronics company became stronger than an entertainment company? I certainly didn't think it would happen in my lifetime.

      Companies much bigger than Apple caved in to the MPAA on region encoding, encryption, etc.

      Jobs is a clever, clever man.
      • Re:Whoda thunk? (Score:5, Insightful)

        by TheRaven64 (641858) on Monday July 02, 2007 @06:25PM (#19722899) Journal

        Jobs is a clever, clever man.
        More to the point, Jobs is an arrogant bastard, who simply will not back down or compromise when he thinks he is right. You'd have thought the other CEOs would have learned by now that bluffing (or even looking like you're bluffing) is a really, really bad thing to do when negotiating with Steve. As ATi learned, he has absolutely no problem with damaging his company in the short term if he thinks it will strengthen its position in the long term.
  • by Quiet_Desperation (858215) on Monday July 02, 2007 @02:56PM (#19720563)

    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.

  • Nose, meet spite (Score:2, Insightful)

    Cutting off one's nose to spite one's face is so appropriate. Both parties here are just trying to get more money out of the other.

    Truly hilarious.
  • Which DRM to use? (Score:5, Interesting)

    by Animats (122034) on Monday July 02, 2007 @03:01PM (#19720637) Homepage

    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.

    • Re: (Score:3, Insightful)

      by UnknowingFool (672806)

      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.

      If anything, music companies benefit revenue-wise from digital sales. Unlike physical medium like CDs, the distribution and manufacturing costs are minimal. And any infrastructure costs are borne by these

    • by DannyO152 (544940)

      I'm guessing that to support a lower cost to customers, Wal-Mart has negotitated lower per unit royalties with the recording company. I don't see them seeing this as a must-get market which makes it worth losing money. So, if the real news is that sales of physical cds have declined and digital revenues have not fully replaced lost cd revenues, selling exclusively at Wal-Mart looks like a classic digging deeper to get out of the hole tactic.

      Meanwhile, if cost is what matters, why has Wal-Mart not become th

    • by mlts (1038732)
      When MS made the Zune from a totally difference code and DRM base (well, not totally different... PlaysForSure and Zune's DRM are both technically WM-DRM format), I fear they fragmented their market.

      Now, if a person purchased a Zune and another PlaysForSure device, they would have to subscribe to the Zune Marketplace and URGE to have unlimited all you can download subscriptions.

      I wish MS could merge Windows Mobile and the Zune codebases, mainly because WM5/WM6 already has all the functionality of the Zune i
  • by athloi (1075845) on Monday July 02, 2007 @03:02PM (#19720657) Homepage Journal
    It was never a sane business model. The value of most CDs is their novelty and hype potential, not the music inside, which is mostly pointless goop for easily-distracted people. They're not going to make a killing any longer, since the means of distribution have now surpassed the means of production. Universal and Apple fighting over a miniscule advantage in a collapsing industry is a sure sign that the entertainment industry has no clue where to go now that its product is no longer scarce by the nature of its distribution.
  • sad, but true. since Bronfman bought 'em (well, most, somehow the original owner always seems to maintain a significant position in the business that disgusted them these days,) universal music has been a pox. snarling and cheering on the RIAA attacks, moaning about wanting a fee from the music player industry, wanting to charge a premium for the songs from the latest manufactured limited-time "band."

    it may or may not be noteworthy to consider that Bronfman had the Seagrams liquor business almost whole, a
  • Middlemen (Score:4, Insightful)

    by petehead (1041740) on Monday July 02, 2007 @03:06PM (#19720705)
    Great, two big companies fighting over their middleman territory. The artist who creates the product and the user who purchases it are just collateral damage.
  • instead of coopting mapster, you buried it. what, you thought it was going to stay dead?

    so some tech compnay reinvented it, instead of a music distribution company

    oops

    guess what? YOU could have controlled 75% of music downloads. instead, you have to kiss up to steve jobs. didn't have to be that way. the only reason it is that way, is because of your shortsighted stupidity on the future of the internet and music

    oh well, you fucked up, you lose. deal with it

    and your little game of brinkmanship here can only m
  • DRM Licensing (Score:4, Interesting)

    by sagefire.org (731545) on Monday July 02, 2007 @03:41PM (#19721121) Homepage
    Apple's refusal to license their DRM

    Oh, if only Apple would license their cross-platform DRM! I know this will be modded as off-topic BUT I wish Apple would license its DRM to the BBC! That way, the BEEB would have an easy way of distributing their content in a non-Windows environment and still satisfy their perceived DRM need. It still would not make a native Linux method of playing BBC content, but it is pretty easy to get iTunes (for example) to run under wine. So, though it is not a perfect solution, at least it would be better than what the BEEB is doing now

    So, go ahead, mod me off-topic, but I am hoping to at least also get to be modded as interesting as well.

  • ...the music industry's preference to shoot itself in the head continues!
  • Or buys a radio station, or two... seriously, there's enough local stations out there that Apple could pick up a few, then, use their radio network to leverage iTunes. Sure, Universal might bail, but, within a few years, top Universal Artists would wind up on the bottom of the hit parade. In the very least, Apple could sponsor up and coming talent out there with better deals, like more money for the artist, or at least, more creative control. I'd be willing to bet that more acts would sign with Apple who
  • Poor Universal (Score:5, Informative)

    by Trogre (513942) on Monday July 02, 2007 @05:28PM (#19722391) Homepage
    So now no more iTunes sales for:

            * Baby Boy Da Prince
            * Bee Gees
            * Drake Bell
            * Black Child
            * Brandon
            * Big Tuck
            * Big Tymers
            * Blak Jak
            * Bloodhound Gang
            * Mutya Buena
            * Vanessa Carlton
            * Jamie Cullum
            * Domination
            * Down AKA Kilo
            * Dispatch
            * Drake Bell
            * Godsmack
            * Gotan Project
            * Chris Gotti
            * Pat Green
            * Harry O.
            * Heavy D.
            * Infinite Mass
            * Ja Rule
            * Elton John
            * Jack Johnson
            * JoJo
            * Juvenile
            * Jordan Flynn
            * Kaiser Chiefs
            * Brie Larson
            * Murphy Lee
            * Lindsay Lohan
            * Lloyd
            * Damian Marley
            * Stephen Marley
            * Mika
            * Mushroomhead
            * Mystic
            * Natalie
            * Pharoahe Monch
            * Prince
            * Rakim
            * Rammstein
            * Scissor Sisters
            * Strive Roots
            * Sunland

    The rest are here [wikipedia.org].

    I'm not a fan of iTunes and have never bought anything off them, but Universals reasons for ditching them can only be nefarious. Okay so Prince isn't going to care, and Elton probably won't either. But if anyone knows the other artists it might pay to tell them what their label has done and that now might be a good time to think about their future with Universal.

We can predict everything, except the future.

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