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."

Re:Worst case?

[Drawkcab]

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:Worst case?

[astrosmash]

Yes - because they don't like what Apple was offering them, DRM-free or not.

Right. And what exactly do they not like about their deal with Apple?

They want to charge you more for their music. They'd like you to purchase multiple tracks for each device you own, and they'd really like it if you couldn't burn those tracks to CD.

Your post makes no sense because Apple has no say in the dealings that Universal does with other on-line retailers. Yes, competition is great. Theoretically, if Universal was uncomfortable with iTunes' dominance in the marketplace they would make sweetheart deals with other on-line retailers to provide cheaper music with more freedom to drive people away from iTunes, and the consumer would win. But that is not what is happening, because they're just too greedy, and the other tech companies too easily roll over to the whims of the entertainment industry. iTunes is successful in part because they're the only ones who have stood up to the record companies.

Instead, Universal uses its dominant position to strong-arm more money out of companies like Apple and Microsoft -- you'll recall that Universal stayed out of the Zune music store until Microsoft agreed to give then a cut of the Zune hardware sales. That's all that this is about.

Re:Worst case?

[LordVader717]

It's not "Apple's" AAC tech, AAC is an open MPEG-standard, and anyone can implement it. A lot of Phones can play the files, and the only reason your $30 MP3 player can't is because the manufacturer decided not to pay for the license to decode AAC (which is significantly cheaper, simpler and safer than MP3 anyway)

Anyway, I believe that DRM-free iTunes tracks can be converted to MP3 by simply right-clicking them and selecting "convert to MP3" in iTunes.

DRM-free tracks are the ultimate compatibility to other players.

The reason Apple wouldn't license their Fairplay DRM is because that would endanger the "safety" of the DRM, and the record companies would be angry if it was easily cracked (or so they say)

No-DRM is better than licensed-DRM, however you put it.

Re:That'll sure help the A/R folks out...

[The One and Only]

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.

Poor Universal

[Trogre]

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.

Re:Worst case?

[Sancho]

Who exactly is selling a more crippled DRM?

Interesting choice of words.

I'd like to know who is selling less crippled music? With Microsoft's solution, to play on the PC, you need Windows Media Player, correct? Music from the Zune store only plays on the Zune. Allofmp3 is closed.

Apple does let you burn their DRM'd songs to CD, meaning you can play them in any CD player. You can also rerip. It's a crappy solution to get it onto a non-iPod player, but it's possible. Do other solutions offer this?

Re:Universal?

[sl3xd]

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, which is only going to increase when Wall-Mart starts selling cheap HD DVD players this fall. (By then the price difference between an HD DVD player and Blu-ray will be around 2-3x), which will be as big a hit to the Blu-ray camp as the PS3 was to HD DVD. (The PS3 is, after all, the #1 selling Blu-ray player).

The format war is far from over, and frankly, there's no reason why it will end. We have multiple console systems, and if you want to play all the games, you have to buy multiple consoles. The market has shown quite clearly that it will support multiple exclusive standards, so I see no reason for either HD DVD or Blu-ray to 'win' or 'lose'.

Frankly, it's not going to matter in a few months anyway. LG already has a (semi-functional) dual-format player, and Samsung (who was previously one of Blu-ray's biggest supporters) is also making a dual-format player. The differences between HD DVD and Blu-ray (outside the physical disc) are small enough to make dual-format players much easier to implement.

With the impending influx of inexpensive HD DVD players from China this fall, HD DVD will be even more compelling to add support for.

Neither format is going either. Just like AAC, MP3, and OGG aren't going to 'win' a format war.

Re:Worst case?

[falconwolf]

"why would any company opt to cut themselves out of that market."

Because the iPod is over 78% of the DAP market thats why.

That's a good reason to stay in the market not opt out of it.

Falcon

Re:Worst case?

[DianeOfTheMoon]

You could look at eMusic [emusic.com]

They let you burn songs to CD any number of times.
They charge less per song than Apple.
They keep a download history, so if you lose the track somehow, you can just go get it again.

Oh yeah, and they sell unprotected mp3's. :)

Try emusic.

[jotaeleemeese]

All the winners of best recordings of the year in BBC Music Magazine were readily available in emusic as non DRMed files.