Apple denies Universal departure rumors

According to the San Francisco Chronicle, Apple is denying recent reports that the Universal Music Group isn't planning to renew its contract to sell music through iTunes, stating "We are still negotiating with Universal". Sources (such as the New York Times, Wall St. Journal, etc.) had said previously that Universal planned to end its contract with Apple, continue selling music via iTunes only as they saw fit, and exercise the option to grant exclusive rights to other online retailers. Now it looks as though the chips aren't off the table, and there may be some reconciliation between the two companies -- or least a few bags of money changing hands.

[Via TGDaily]

[Greg3d @ Jul 4th 2007 8:18PM]

They're still negotiating, but even if the negotiations fail, they'll still use their work.

Isn't that their MO? Negotiate, then pull out and use the other persons work anyway.

[booyaka @ Jul 4th 2007 8:47PM]

Take THAT Apple fanboys! *points and laughs*

[wmw @ Jul 4th 2007 10:06PM]

...and there was me thinking Universal Departure was a cool, new piece of Apple software
:(

[Rob @ Jul 4th 2007 10:18PM]

Universal is not going anywhere. After all, iTunes is the big daddy of online music sellers. As a matter of fact, iTunes is the 3rd biggest music seller. This is as silly as the movie studios trying to play games with Wal-Mart. They know Wal-Mart is their major seller, and that's why the Waltons can do whatever they want.

What Universal wants is a cut of the iPod sales just like they got from MS and their Zunes.
This is ridiculous. What's their reasoning behind demanding a fee??? It's not like the music, or audio content, everyone puts on their iPods comes from a particular label.

[B1663r @ Jul 5th 2007 1:16AM]

The rational is that the music industry is dying and iTunes revenues are not making up for their shrinking sales.

Comon admit it. You know of or have access to a communial hard drive that has 20-50k songs on it and gets shared around.

[cs0875 @ Jul 5th 2007 8:55AM]

First off, I don't now which artists are on Universal, EMI, Geffen, ect. ect. Most consumers don't either. Lets say for argument Avril Lavigne is on Universal (I really have no clue whether she is or not), and lets say some 16 year old wants her new single, they go to iTunes and it isn't there. What are they going to do? Download it illegally? Probably not, if the teen knows how to download illegally, they will do that rather than use iTunes. The teen will probably go to Rhapsody, Yahoo!, Wal-Mart, or some other site to buy it. If someone wants a specific artist or song they will buy it where they can.

Look at this example, lets say Target wants to be the only department store to sell iPods, so they make a deal with Apple not to sell iPods in K-Mart or Wal-Marts, but in return they make no money off the iPod, they just want to take customers from Wal-Mart and K-Mart. Would that be bad for Apple? Probably not, they may lose a few sales from grandma who doesn't know the difference between MyMusix MP3 and an iPod, but overall customers will just go to Target instead of Wal-Mart. Apple sells the same number of iPods and all the ones in Target they get more money for. Same thing with music.

Also, think about this. What if Universal made an exclusivity contract with Microsoft, to only sell their entire catalog on Zune Marketplace? They advertise for all their artists only available on the Zune or on CD. If you are a big Avril Lavigne fan, you may buy a Zune instead of an iPod. Will this kill the iPod? No, just like Boot Camp or Parallels won't kill Windows, but it would theoretically help the Zune marketshare like Boot Cape and Parallels will help the Mac marketshare.

[Rob @ Jul 5th 2007 10:02AM]

But let's remember one major detail here. iTunes is for iPod owners. So, unless you're willing to buy the cd and then rip it, which is something people don't want to do because otherwise online services wouldn't exist at the level they do nowadays, or get your music from drm free sites, then iTunes is your only choice. And let's face it, Napster, Yahoo Music, and iTunes have the biggest libraries. However, as we all know, Yahoo and Napster are not compatible with the iPod. So, that leaves these owners in a very compromising position.

So Universal is trying to bite the hand that feeds them. Apple and Universal need each other. These days aren't good for exclusive deals, especially in those volumes. Universal can't afford to isolate iTunes and go with MS, or vice-versa. I have 4 iPods and I've only spent maybe $7 in music from the iTunes store. But that's because I don't see the point in buying content wrapped in layers of DRM and in a lower than CD quality. And yes, I'm aware that one can now buy drm-free music, and that music bought at these online stores can be burned and ripped right back into drm-free mp3 files. But, what's the advantage in that whole process when I can buy the cd, rip it once, and I'm done. I can transfer that file into any mp3 player available, on computer or stand alone unit.

Again, I don't particularly care if Universal leaves Apple or not. As mentioned above, I don't agree with the iTunes store concept. However, I do care when Universal is clearly trying to extort money from Apple just so they can get a cut of the iPod share. Why? And why did MS gave the labels a cut of the Zune sales. It doesn't make any sense at all.

[Shelbz @ Jul 4th 2007 10:24PM]

Can we get more iPhone stories now?

[booyaka @ Jul 4th 2007 10:49PM]

So you can hear how much shit the iPhone DOESN'T have?

[Shelbz @ Jul 4th 2007 11:14PM]

What do you mean? It's REVOLUTIONARY!

Who needs archaic technology like UMTS/HSDPA?
I laugh at video recording...so outdated.....and MMS...oh my God who uses that anymore?
With battery technology as it is now, who needs to remove a battery, its not like they fail or blow up right?

[RJR @ Jul 5th 2007 12:02AM]

How is the iPhone and iTunes a monopoly? There are plenty of other phones that play mp3s that work with other software.

[Zacharias @ Jul 5th 2007 12:49AM]

1. Wow, iPhone haters are insano.
2. Universal is going to end up hugging those zen monks of apple in the end. Where else can they go? (Zacharias, http://bsgeek.com)

[B1663r @ Jul 5th 2007 1:21AM]

They have been doing it a lot recently. I was wondering why they didn't do it to Adobe with a flash client on the iPhone.

[Anthony Medica IV @ Jul 5th 2007 5:42AM]

You gotta wonder if this might be part of the whole deal Universal has with Zune..

Anyways, I think Universal can live without itunes. They are the ones releasing music afterall, not itunes. All they have to do is open their own online music store offering DRM-Free tracks for whatever price they want, and they'd have customers.

And of course, Jobs isn't going to admit weakness. No company is ever leaving itunes. They're just in itunes. Much like how itunes will NEVER see the Beatles.

[Rob @ Jul 5th 2007 10:08AM]

No, you're wrong. It would not be that easy for Universal to "All they have to do is open their own online music store offering DRM-Free tracks for whatever price they want, and they'd have customers." If that was the case, then every label would've set up their stores long before iTunes came along. It takes a lot of investment to get to the level of operation that iTunes is at. If it was that easy, then why is Napster struggling so much. Plus, by your rationale, we can say the same thing about every consumer product.

There is one major thing the labels don't want, and that is to release drm-free files. They're doing it just to see if they can go back to the pre-Napster days. But, at a %25 higher price too. What's the advantage in that over buying the cd?

Also, it's not a "for whatever price they want, and they'd have customers" either. Customers will dictate the price. If we thought $0.99 for a track was too expensive, the price would be lower. So, it's all in our hands, the consumer.

[JinKazama @ Jul 5th 2007 11:04AM]

If I'm little stevie jobs I let them go. All they want is a cut of ipod sales and an increase in price for tracks, which like the RIAA...IS TOTAL BS! So what if universal leaves itunes, people will just steal the content to put on their ipods.

Seeing as iTunes is really a break even proposition for apple losing Universal really wouldn't suck. The ipod is THE music player to have and the iphone is quickly becoming THE phone to have. So 7 times out of 10 any musical or movie content bought that someone wants to carry around winds up on an ipod anyway.

The only loser in this would be Universal, Yeah I know they have a boat load of content but not having your product on the "shelves" of the #3 music retailer is going to hurt after awhile.