Universal Severing Ties With iTunes?
Universal Music Group has pulled out of iTunes. That's according to The New York Times, which, citing anonymous sources close to the negotiations, is reporting that the world's biggest music company has opted not to renew its contract with Apple to carry its artists on iTunes -- artists that include U2, Akon and Amy Winehouse.
The move by Universal is an attempt to coax Apple chief Steve Jobs into spreading the wealth that's been raked in thanks to the successes of iTunes and the iPod. Jobs currently has the music industry eating out of his hand: More than 100 million iPods have been sold worldwide since its invention, and yet the only copy-protected digital music service that works with it is iTunes. iTunes, for its part, accounts for 76 percent of all online music sales -- the only sector of the music industry currently experiencing any growth. Of course, the iPod is the only player that works with tracks purchased on iTunes.
Universal is such a massive player in the music business that its artists are responsible for one out of every three new music releases in the U.S. Losing Universal will be a blow to iTunes, though the reverse is also true: In the first quarter of 2007, iTunes accounted for 15 percent of Universal's worldwide revenue.
For now, it appears Universal will offer its music on iTunes without a contract, meaning it can remove its artists completely at any time with no advanced notice if it's not happy. That day may come sooner than later, since Steve Jobs has repeatedly refused to even entertain the notions Universal and other music companies are asking of Apple. They include allowing the iPod to be used with other services, allowing iTunes to work with other players and putting an end to flat rates for music files. The music industry wants the right to sell more popular songs at a premium and sell less popular songs at a discount.
For now, it's a stalemate between Apple and Universal and it'll be interesting to see who cries 'Uncle' first. Of course, it doesn't hurt Steve Jobs that he's a pro at twisting arms.
From The New York Times
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Reader Comments (Page 1 of 1)
Emma said 12:23PM on 7-02-2007
Steve Jobs is not a genious at twisting arms. He and Apple practically went belly up in the 90's because of his schrewd and asinine business sense and not sharing his formatting. And he's doing it again. My 12 year old bought an Ipod and took it back it was so complicated and instead bought a Sony PSP for 1/2 the price and does 4 more things than just play video and music. He is looking short term and should expand.
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John said 12:16PM on 7-02-2007
Not a big deal for me as I use a Creative Zen M so I can use any MP3. I still buy CDs and don't use a download service. I HATE the fact that the download services won't let you see their catalog until you have "joined" their service and are paying their fees. Sorry, that's not for me.
Which side am I on? I favor paying less for less popular tracks and more for popular tracks, but that's my opinion.
Then again, for out-of-print tracks (which you can't buy anywhere) I don't think there should be any penalty for sharing. If you are a record company and want to get paid for the track, then sell it! If you take it out of print it should go into the public domain and be sharable.
In my personal collection I have hundreds of tracks that I've recorded off of my LP collection because they have been out-of-print, sometimes for decades. My LPs are in good to excellent condition and I can make excellent WAV and MP3 files from them. I've done the same with LPs I inherited from my parents. The real horror would be for some of those old recordings to be lost forever. That would be a crime, not sharing them.
My children have iPods, and use iTunes, so it is interesting to get their reactions and those of their friends. Basically, they don't care. If they can't buy it through itunes (yes, they buy their music whenever possible), they will get it some other way, and probably not a way Universal would want them to get it.
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Joshua Fruhlinger said 3:28PM on 7-02-2007
Perhaps so, Emma, but Steve Jobs wasn't working at Apple during much of the 90s during that dark phase.
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