Hot on the heels of the
almost-ran reconciliation between Apple and the Universal Music Group, the music label has issued a statement saying definitively that it will not renew its long-term agreement with the Cupertino juggernaut. All this news comes at the tail-end of an extended negotiation period fraught with
leaked info and damage control (mostly from Apple's end of the table). The new arrangement will enable Universal to deal with iTunes sales "at will," thus allowing them to market music freely to other retailers, as well as offer exclusive arrangements with whomever the company chooses. It can be assumed that Apple honchos are not very stoked by this turn of events, considering Universal is responsible for one out of every three records released globally, and this will only increase their ability to control online distribution. Can't be fun to be the Jobs-man today.
[Via
iLounge]
posted Jul 5th 2007 11:36AM
This may be bad for everyone actually. Apple has done a good job of keeping their prices locked at $0.99. Lets just hope Universal doesn't find some other online distributor that is willing to do more flexible pricing.
looks like Apple's World Domination Plan® just had a setback.
Let's see, Apple makes very little from music downloads but continues to sell bajillions of iPods (and now iPhones). Universal's sales are slipping dramatically. Consumers are becoming even more agitated by the big record labels and the RIAA. Yet somehow Universal getting antsy about the #1 online music store is an *Apple* problem??? Wow, nice spin.
Hey Universal, give the Zune Marketplace a try. I hear they have *dozens* of users now.
Record companies must die. I pray for the day when I can buy music directly from the artists via whichever online store (iTunes, etc.) I want, with no input from the recording cartels like Universal. Come on artists, it's time to sever your recording contracts for gross negligence by the labels and embrace the digital age. U2, I'm looking at you.
Let me guess you own a Macbook, an iPhone, an iPod. Am I right?
No iPhone yet, but you nailed the others. Nice work!
Not surprisingly, I can also dial you in with uncanny accuracy. You live in your parents' basement, spend your days trash-talking in FPS games on your home-built PC (with see-through case and neon lighting awesomeness!) and have a poster of dreamy Steve Ballmer on your bedroom wall?
Keep hating. Apple will keep rolling. Forward.
P.S. sadly, Engadget removed your original profane comment to this story, which revealed you to be the classless troll you are.
@Quix
And you are better than the troll because....
You might have started off better, but you quickly sank to his level.
How can puppets dump their puppet masters? They will be motionless. That's the case of most "artists"!
"I pray for the day when I can buy music directly from the artists via whichever online store (iTunes, etc.) I want"
Directly from the artist via online store is not "directly from the artist". I pray for the day when I can log onto www.cowboyjunkies.com (or whatever) and get the music DIRECTLY from the artist. Eliminate ALL middlemen
How can puppets dump their puppet masters? They will be motionless. That's the case of most "artists"!
oh noes, Quix and his "I'm not fanboy yet am a fan+boy" attitude has wallowed over from digg. Now we need flag564 to make this migration of "idiotic Apple/MS fanboy wars" complete.
I totally agree. Record companies must die. $15-20 for a cd and the artist sees very little of that, and we're the problem? Universal is shooting themselves in the foot on this. The only good thing that they could do is open their own website with drm free downloading. Otherwise is suicidal...
Take a look at the movement to get radio stations to charge per song...
Why do all the Apple articles end up having comments all about Microsoft? Honestly, behind some closed doors in some top secret location Jobs and Gates probably sit back, laugh, and plot some new strategy to keep everyone on their puppet strings.
Just because I use more products from Microsoft than Apple doesn't mean I need to post some fanboy bs in every comment section of every techblog in the universe like some (many) others. Find something more constructive to do (like posting a comment relating to the article)!
On a more related note to this article. Maybe competition will help lower prices for online music distribution, not increase them. I don't honestly believe that Apple was using iTunes domination to help keep prices low. They just found the price that worked for them, now with a little less exclusiveness we can really see where the market is going.
The record industry is supposedly suffering due to loss in record sales, and I like many other young people continue to copy music from the Internet without the slightest concern. That's a problem to the artists, and at the end of the day to the listeners, because we can't expect the musicians to deliver free music, at least not at a professional level. So is professional music doomed?
The idea I’m going to present to you is rooted in reality, unlike the ideas of the record companies. It will “legalize” the MP3 format in a reformistic way, it will give musicians more creative freedom and it will make musicians earn money that way.
Reality – MP3
All people can manage to pay some amount for a piece of music, but as soon as an individual’s price threshold is crossed, and this is very important, the alternative is obviously not to pay! That's reality, people aren't going to pay if the price is too high. Further, if the process of purchasing music is too dificult and implies too many disadvantages, people might not be willing to pay anything at all. Either realize this reality, or fail any attempt to save the music industry.
Reality is that it’s impossible to prevent the copying of music. At some point the music has to be transformed to either a digital or analogous audio signal, which can be copied, and just a single copy is potentially spread like wildfire on the Internet.
Reality is that the MP3 format has many advantages over the CD.
*Doesn't take up space in the shelves.
*Doesn’t get scratched.
*Is faster to search and find specific tracks.
*Makes it possible to compile your own playlists.
*Offers loads of smart features like visualization plug-ins, automatic lyrics lookup (evil lyrics), automatic music recommendation (audioscrobbler.com), etc.
*Cost’s almost nothing to distribute.
*Is easily distributed over the Internet.
*You don't have to go anywhere to get your music, you can download a track within minutes (and speeds are increasing).
*A wider selection is already available on e-mule and WinMX than almost any store.
*Is stored on any digital medium (harddisks, memory sticks, CDs, DVDs, micro drives etc.).
The disadvantages are
*It’s mostly illegal
*Some believe that MP3 is worse quality than CD (I believe this to be a confusion between the quality of a recording and the limit of the MP3 format. I have very good HiFi equipment, and can’t tell the difference between a good MP3 and a CD.)
To me, and many others, the MP3 format is so convenient, that we don’t even care whether it’s illegal or not. Reality is that we aren't going to sacrifice the advantages of the MP3 format, just because some butthead says it’s illegal. If I was recommended a piece of music through ICQ, AudioScrobbler, AllMusic.com or whatever, should I then spend an hour or so going to the music store, buying a whole CD with lot’s of stuff that I don’t want, going home, ooops scratching the CD? No way! I’m already online, it’s right there, the music, you can’t fool me! Neither can colourful CD covers, the marketing machine or PR stunts.
This is a new paradigm demanding a new solution
Problem – Record Companies
The problem to me and many others is that we like our artists. That’s the ones we love, not the leaches sucking the blood from our artists. The distribution of music sucks 90%-95% of the retail price. Whoa! So even if we go to the store, take our time, just to support our artists, only 5%-10% would be scraped of to the artists??? No! It’s even worse, the musicians have to pay the marketing costs out of their humble budgets themselves. Typically big artists have to sell more than a million CD’s, just to be break even!
It’s no wonder that the record companies cares so much about their current “symbiotic” relationship with the artists, and anything that could possibly upset it.
One thing that upsets the record companies the most is this new reality, they can't ignor it and keep their huge profits and they can't conform with it and keep their huge profits. Instead they are trying to fight this new reality, pissing everyone off.
The core problem to the record companies is that they can't monopolize distribution of music on the Internet, they aren't even needed to distribute music, if they could, they would most certainly shut down the Internet.
Solution - Taking advantage of reality
In order to find a solution that can satisfy both the artists and the consumers of music, we must make a concept based on reality.
The record companies must die, they are nothing but a pain to the consumers and artists, they have no purpose in the market economy anymore. That's even true for those who want's a physical CD, artists could distribute their music dirictly to any store or consumer through the Internet and then the store could print high quality covers and CD labels.
The music is obviously best distributed via the Internet. It makes no sense to produce CD's in America and send them by truck and boat to Europe, risking shortage or abundance of CD's, when it's almost free and free of risk to distribute the music via the Internet.
We can't force people to pay, but almost everyone (at least those who can afford a PC or MP3 player) can manage to pay some amount, but the individuals threshold for how much he/she is willing to pay varies a lot. A common man in Bolivia has a much lower threshold than a common man in Germany. Further a poor man in the United Kingdom has a much lower threshold than a rich man in the United Kingdom. But all of them can manage to pay some amount, however small. So, why not make everyone pay what they can manage to pay, instead of only making those who have a high income pay? The trick then will be to get people to pay as much as possible. Basically what I'm suggesting is motivated voluntary contributions.
Then, why not take advantage of the huge, world spanning and efficient distribution network already in place? The file sharing services like eMule, WinMX, iMesh, Bearshare, Grokster, eDonkey etc.? If contributions are voluntary albeit motivated, then the distribution network doesn't really matter, does it?
Further, what is making the file sharing services so efficient is that everyone is a server and everyone is a client. It's a bullet proof server, allways online, costs close to nothing and has enormous amounts of diskspace and bandwidth. The more widespread a track or a whole CD is, the faster it is to download. This means that if the system that I'm about to suggest works, if you can actually make people who have been riding free contribute, then it is in the interest of the artists that their files are as widespread as possible, in order to recieve as much contributions as possible. The reason why files become widespread is that they are free to distribute! Everybody can listen to music for free and then support the artists that they like.
So, what's the difference between the existing system of anarchy and my suggestion?
How would you support an artist with 2$ today? Huh? International moneyorder? Thats expensive? If you live in the same country as the artist, you might be able to make a fairly cheap transfer, but do you know the account no. of your artist? You could write an e-mail to the artist, expressing your desire to contribute 2$, I'm sure he would understand....
I think this illustrates the base of the problem, it has to be cheap and easy to contribute, else it won't happen. The more easy it is to reach the point both practically and mentally where one pays, the more contributions. We don't want to enter a lot of information like credit card number, expiry date, name and the like, especially not if it's only for a small amount of money. It has to be simple, like just entering an amount and the click "send", then it would be 1) convenient 2) economically manageable to everybody. Furthermore it should be possible to do while downloading or playing the music, while the user is at the computer anyway.
So here is what we’ve got to do
1. The very basic first step is to make it possible to make small contributions to artists.
2. The second step is to make it incredibly easy.
3. The third step is to motivate contributions.
4. The fourth step is to start a process that legalizes this kind of payment.
1. Make it possible
Some of the existing file sharing networks, MP3 players or a service like AudioScrobbler could create user accounts where users allocate a certain amount of money, the normal way by paying with VISA/Mastercard or the like. Then the user could allot small amounts on different artist accounts. The services maintaining the accounts could charge a fee like 5% of the contributions.
2. Make it easy
People are lazy.
What could possibly be more easy than having a contribution plug-in for WinAmp, showing the current artist playing, a text field for entering any amount and a “contribute” button? Well, yes, “auto contribute” to every piece of music played, but that should be an option.
How?
Have an account at AudioScrobbler, Winamp or some other service, put some money on it and let the service distribute the money according to your choice. It’s really that simple, and in reality a little difficult to realize.
3. Motivate contributions
People are egoists.
People are different, some likes to show off, some likes to be respected for their authority, some like to be seen as good people and others need respect for their technical ingenuity.
So let people show off, earn respect, contribute money and contribute technology, make us feel good in our own egoistic ways.
Show off.
50 largest contributors? 50 largest contributors to a specific artist? To a specific song? Of the year? of the month? of the day? How much did he contribute? Let there be many winners!
Earn respect.
Some people just need respect for their honorable compliance with society. They would dutifully contribute to those in need and make rules apply.
Be good.
Some people are more idealistic, they would do whatever is needed to make the world a good one. They need to be good, because they need to be appreciated.
And contribute technology.
A very rare specimen in modern society are the wizards of technology, those that makes MP3, Winamp, Internet and all of that happen. They might only be interrested in contributing technology.
Another method to increase contributions is to emphasize that this is actually a form of democracy through the wallet, what you contribute is what you get. The musicians’ career would depend on how much the users like their music. The users no longer support artists on compilation CD's that they don't like, and further more their money have a stronger effect on the survival of the musician as not 5-10% of the money goes to the artists but instead 95%.
4. Make it legal
Legalizing this kind of contributions as a way of paying for art would beyond doubt increase the motivation to pay, especially amongst those authority people. Letting the users pay conditioned contributions that would only be paid to the artists when they accept this system as a legal form of distribution, could do this. If suddenly there were a considerable amount of conditioned money accumulated on a musicians account, he would probably sing a song to his record company about a “symbiotic” relationship that somehow broke into a million pieces.
Of course there would be a lot of artists who wouldn’t be willing to accept voluntary contributions as legal payment. Well, we the consumers wouldn't care too much, we copy the music whatever they want their money or not. It is important to note that this is not about revolution; it's about reforming the system and turning more and more musicians from the old to the new system. There is no need to have the support from all musicians right from the start, even though this might be the long-term goal. What we need are some pioneer musicians.
The mere news value could make some musicians accept this as a legal form of distribution. We have already seen musicians that have supported Napster, even though it's not in their immediate interest.
Also the fact that many (if not all) musicians don't enjoy the same freedom in the existing system could motivate a lot of musicians to change.
And there probably exists or could be created other motivating factors.
Perspectives
It will not be possible to get completely rid of free riders, there always are somebody that will not pay the price, but this was also the case before the invention of the Internet.
Certainly there are musicians that earn a lot of money today, but that's a very small group that is blessed by the record industry. The system I have described would probably create some concentration of money as well, but I think it's beyond doubt that a lot more musicians would experience to earn money. They don’t need to invest or make big contracts; they only need to be good at their art.
It is possible that the Users of the Internet would not pay anything near what they pay in the record shops, but at the other hand, if just 20% of the amount paid in the shops is paid on the net, then both the consumers and the musicians would have gained considerably, and that I think is very probable.
Conclusion
To me there are no doubts that copying of music can't be stopped, it will always appear in some form. If we try to prevent it we just end up hurting ourselves a lot. We would need some kind of totalitarian system to get rid of it, so the most constructive solution would be to make the best out of the current reality. We can't force the consumer, so why not motivate them?
I argued for a simple solution based on voluntary contributions that is to be distributed through a payment system, integrated in some sort of music service like WinAmp, AudioScrobbler or a file sharing service.
I believe that it is of greater importance to make it easy and manageable to a wide range of people to contribute with some amount, instead of trying to force people to pay a fixed amount.
I have also pointed out ways to motivate consumers to contribute, and ways to motivate musicians to accept this system. I hope that many more people would contribute with ideas in this regard.
I see a great possibility for musicians and consumers of music to get rid of a big and expensive record industry that neither of us really need.
This is not meant to be a revolutionary system, but a reformist system that slowly develops and is being tested/corrected through its development.
At last I want to say to all those sceptics that criticize this as pure romance, come up with a better idea, but do keep in mind that the distribution is already here and it's big, nothing suggests that it can be stopped and the consumers would demand a legal form of distribution on the Internet anyway.
"Can't be fun to be the Jobs-man today."
Umm.. I'm sure the man's not going to be losing sleep over this one. He just sold a ton of iphones and premiered a new Pixar film. I'd take his future over Universal's any day.
Exactly! I wonder if Universal has even realized that their threat in fact will cost them even more. Now people will resort to more P2P techniques to get their music fill.
It seems to me that terminating sales on the number 3 music distributer is pretty stupid. are they hoping to scare apple into upping their prices? universal must be doing this in hopes of getting more money.... frankly the big music industry needs to realize that the profits of yore are not the profits of today.
while it is probably about money a lot of labels and artists are struggling with itunes. to get any decent placement on itunes you have to offer exclusives (usually remixes or live tracks). this is screwing other retailers and devaluing the product. for instance, the label might throw on a crappy remix just so they can get a listing on itunes' front page...
if universal signs a year contract apple holds all the cards. universal is actually smart... they're not going to pull out their music. that's stupid. but it allows them more freedom to negotiate with apple AND other retailers on an ongoing basis. placing "exclusives" with one retailer isn't good business practices... your trapped into marketing to only one set of customers.
I think you guys are missing something. You mention that pulling music from #3 retailer is bad. It isn't necessarily a bad thing if done right. People don't buy music because they have an iPod, they buy an iPod to listen to music. If you can't get the music you want on iTunes for your iPod you either won't buy and iPod, or atleast not use iTunes. If you are a big fan of an artist on Universal and they leave iTunes are you going to stop buying their music? No, you will buy it somewhere else. Those of us who read Engadget understand DRM and why it sucks, but of the 100 million iPod users most of them have no clue about DRM and how it effects them. All they know is, I was able to get my favorite artist, now I can't. Why? Oh, iTunes doesn't have it, lets see who does, oh, Zune Marketplace does, I will get it there.
Like Microsoft or not, think they are scum or not, they now how to make money, and how to position themselves in unique places. Look at Office, if you want to be productive in business you need Office, thats why it is sold on Macs. They have the Xbox 360 which is a trojan horse into your living room. You can use it as a DVR, stream music and video from you PC, purchase TV shows, and rent movies with out even using you PC. It is what AppleTV should've been (without games of course). So an exclusivity with Universal on Zune Marketplace, and Xbox Live Marketplace for music videos could be lucrative for both parties. People will still buy the music, just not from iTunes.
@ cs0875 - but you see, thats just the thing - for some/many of us, there is no "second choice" to get the songs we want, or at least none that are as easy and work as well as iTunes. I'll be honest here - i has an ipod before i used itunes and for a long time iTunes wasnt available in Australia, so i was doing what everyone else seemed to be doing - pirating their music. When iTunes come out, and it made it so simple, i stopped pirating and started buying it legally - as did many others. Now i realise what you are saying, but the fact of the matter is that if universal DO pull out of itunes, there are going to be a lot of people who want their music, but they are not all going to want to subscribe and be locked into paying each month to keep listening, and they are certainly not all going to want to download their music in a "Play's for Sure" format that is most certainly not going to play at all on their iPod.
My personal hope is that they pulled out because Apple has been increasing the pressure for DRM Free music and universal wern't happy to join in the fun - with any luck the rest will and universal will see what they are missing and be FORCED to release their stuff without the crap.
It seems like Universal got sick and tired of bending over backward for apple. AT&T on the other hand...
NOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO!
Well I only buy from EMI anyway!
Here's to hoping they come back crawling. With DRM free music I might add.
And of course, this comes on the heels of Apple selling at least 500,000 new music players in one weekend....
I would also note that Apple's stock is up, while Vivendi (VIV) is basically flat on this news.
And I'll bet you that 80% of those 500,000+ already owned an iPod, so they won't count as "new" iTunes users, and there's nothing at all guaranteeing any of them are going to buy any(more) music from iTunes.
And....your point is? I never made a mention of "new" iTunes customers, and I think your statistic is completely fabricated. And so what if they don't buy from the iTunes store? Apple makes money on the hardware, not iTunes.
And so what it if you're right. To me, it shows that customers are committed to the Apple brand to the point that they are willing to shell out $600 for a new gadget, and that they aren't really tired of the iTunes "model" or the iPod "brand". If Universal thinks they can get equal market share or exposure through any of the competitors, they're smoking dope. Those iPhones, even if they were to a significant number of existing iPod owners, are just another layer of quick-drying cement on the market for Apple's lead.
How many people out there even realize that Universal is the one selling them music? Probably not that many.
Oh, and it looks like they hit 1 million handsets today.
Stock report: Apple up 4.3%, Vivendi, down 0.63 %
Then what exactly was your point with relating the sale of the iPhone with this article involving iTunes and Universal?
You were the one who made the post, and the connection. Don't criticize someone else for wondering where you were going with that. On top of that, in your reply your basically said that your first statement did not have anything to do with the article. What exactly are you trying to say? I see the stock, what does that have to do with anything you said?
I am more curious than anything to where you are going with these comments/contradictions.
My point is, which one is in the stronger position regarding the distribution of digital music? The content provider, who while having a lot of material has only a number of 'also-ran" outlets to go to as an alternative, or the company which just demonstrated its continued dominance of the DAP market by moving a million high-end players over a long weekend?
Universal may own a ball, but Apple has the largest court to play on.
Some how I doubt even his worst day is really that bad.
I wonder if, at the end of the next fiscal year, Universal will continue to blame slumped sales on piracy rather than crappy business practices.
you mean blame the actual culprit? never
Time to buy a Zune friends!
Are you just trolling, to make the Zune look bad? It's not working.
NOOOOOOOOOOOOOOOOOO! I NEED UNIVERSAL ON iTUNES!
universal will still be on itunes, just not an exclusive, long term contract. this gives them more flexibility to provide music to other e-tailers, and in the long run stimulate more competition between online music retailers--which lowers the price for us at the end of the day.
it's a good things, folks. "locked" prices are bad, varying prices based on what the consumer values the product at is good.
I don't see how price gouging is good...
all the apple hating aside, which there seems to be a lot of it for some reason. I guess when you're number 1 online music retailer you'd be hated on regardless of brand.
but from a business stand point, why is universal doing this to themselves?! it's a bad move...if you want to branch out and not be tied to one retailer then negotiate something to that affect, dont just shoot yourself in the foot. The industry is making less and less money so they're trying to make as much w/ whatever they can that generates an income
People hate Microsoft in debates because they are they have most of the market, and must be evil.
People hate Apple for the same reason.
The only difference is, Microsoft one time actually did something bad to earn them that reputation. During the browser wars they played silly games and lied in the courts. Now it doesn't matter how many truths they tell, trust isn't coming back, and they are evil.
If Apple or Microsoft where to drop even, they would still be disliked. A new successor would arise in the market, and we would begin to dislike them if they grew in power.
agreed...it's the top dog syndrome, you can be the best of what you do and are nice etc etc but still be hated on because you're number 1
No iPhone yet, but you nailed the others. Nice work booyaka!
Not surprisingly, I can also dial you in with uncanny accuracy. You live in your parents' basement, spend your days trash-talking in FPS games on your home-built PC (with see-through case and neon lighting awesomeness!) and have a poster of dreamy Steve Ballmer on your bedroom wall?
Keep hating. Apple will keep rolling. Forward.
P.S. sadly, Engadget removed your original profane comment to this story, which revealed you to be the classless troll you are.
weak
Incredible display of maturity here.. geez.
Of course fanboys will chime in, but is this really a "point for Apple" matter? While I'm sure there could be more discussion between Apple and the record labels, it's not like the labels are these giant altruistic organizations, seeking to further the cause of good music world-wide. They're looking to make money, plain and simple. The decreased market exposure (should Universal decide to withdraw its artist from iTunes) would hurt the bottom line significantly. I guess I see this akin to free-agents. Universal can move around as they wish, but they'll still have to play by the rules of the game. People won't pay a premium on iTunes to d/l Universal artists.
It just seems like Universal's extortion tactics didn't work. Microsoft caved in to their demands and gave them a cut of Zune sales, or perhaps it was a bribe on their part, who knows. In either case, it hurt consumers and gave labels a sense of bravado. If Apple started catering to the labels' demands for more money like this too (which they have repeatedly refused to do), it'd be bad for every consumer, whatever media player they have. Universal isn't stupid enough to sever the tie completely at this point, but I'm sure they're hoping to get someone to fund their greed, and don't care who it is. Apple created the technology behind iTunes, manages the accounts, payments, servers, etc., marketed the software and created the third biggest music retailer from nothing - and the labels want to play extortion? And people think that's Apple's fault, and not Universal's greed? It's the classic issue of trying to claim that the product is more 'valuable' than service. Sometimes product owners forget that there's a whole lot of value in someone handling the service part of distribution for you too. They both need each other, and playing chicken out of greed helps no one.
This is the truth. I could shop for my groceries at Albertson's, but their service is crap. Sure, the products are exactly the same as they are down the street at Publix, but at Publix the service and presentation are leagues ahead, so I shop there because it's a better experience.
Meh, who cares. I don't use anything that Universal makes anyway. And never will....
Sadly, this means higher prices. Expect Universal music to go up to $1.99 for new releases.
Hurray! hope that makes everyones songs go up the same amount. That would be funny balls. Here's to not buying online music.
Why are so many people here over-reacting as if Universal has actually PULLED music from iTunes?! They haven't. Nor have they threatened to do so.
This is only a negotiating tactic by Universal - nothing more. I'd even go as far as to say that the move is pretty smart: It gives Universal the ability to better work with other music services; keep their songs on iTunes to rack up sales; plus, remind Apple and others just how fragile/important the deals with the labels are.
Now, if Universal began allowing DRM-free tracks....
Or it's not that smart at all.
We all know Jobs doesn't like getting f***ed over, and I'm sure he doesn't like this deal [especially because it's been in the press as Universal - not Apple - making the decision.
I'm guessing we'll slowly see Universal music disappear from the front pages, and not be as promoted on iTunes. I wouldn't be surprised if Apple tells Universal one day that they won't be selling their music on iTunes anymore.
And I'm sure they won't make life easy when Universal come crawling back.
Universal is simply universally stupid. If it goes up just ONE cent, guess what will happen? :-)
LIMEWIRE, EMULE, TORRENT ATTAAAACK!
Like I said, every company has a moron, in this case, its a universal ceo!
Does this mean that they'll be removing NBC and partner networks, as well as movies? If so, they really shot themselves in the foot with this one.
Universal is the renegade of the media world.. first supporting HD-DVD .. now this! They do their own thing.
Now, we need to get Sony labels to stop supporting.. and iTunes is iGone, with 50%+ of the tunes not availble.
Universal Music Group and NBC Universal are two differernt companies. UMG is even in the Blu-ray camp.
Now what's Universal's take on this story, I wonder:
"Yup, Apple sucks all the money and we get no profit."
Apple's take:
"OMG YOU IS USING OUR CD LOGO!!!! I'M GOING TO SUE YOU FOR MILLIONS!!!!! HA LOL WTF"
Bad timing for Universal. The specter of smarmy music moguls does not impress versus a man (Jobs) who's riding high with good designs. Who cares about, or for, Universal....
I still think Apple holds most of the cards...
http://www.last100.com/2007/07/02/why-apple-doesnt-need-universal-music/
They make money through hardware (iPods) not content.
Geez chill out and stop complaining… you cant blame Universal for trying to maximize there profits by trying to renegotiate their contract with APPLE. And why would a record company want a cut of the sales of a player thats built to play there property. HELLO ITS CALLED BUSINESS… AND UD BE STUPID IF U THINK APPLE CREATED ITUNES TO OFFER MUSIC for profit. They created it to cover the fact that there the most popular MP3 player thats built to play 1000s of mp3s. it was smart to make friends with the record company and offer music to also help push their player. I know Jobsy doesn’t expect me to fill that thing up with .99cent tunes. Yeah iam gonna spend $300 bucks and then fill it up with THOUSANDS of dollars worth of music. Id love to see what the percentage of music on a given ipod is bought from ITUNES… iam just ranting now its end of month and ive got financials to work on….
Apple is in the better place here:
1) If I were apple I drop all the Universal music inmediately and see what artists do.
2) Sign and promote those unsigned bands that usually play good music but do not have money for self promotion.
3) Even load the new ipod with all of those unsigned bands.
4) Start a new section in itunes about young hollywood producers that want to put their shorts in front of the public.
5) But stakes in Warner Music
With these things done correctly Universal is not needed in itunes, artists will rush to sign with apple... just like in japan.
Apple isn't allowed to buy stakes in any record company as part of the agreement with Apple Records.
Apple is in the better place here:
1) If I were apple I drop all the Universal music inmediately and see what artists do.
2) Sign and promote those unsigned bands that usually play good music but do not have money for self promotion.
3) Even load the new ipod with all of those unsigned bands.
4) Start a new section in itunes about young hollywood producers that want to put their shorts in front of the public.
5) But stakes in Warner Music
With these things done correctly Universal is not needed in itunes, artists will rush to sign with apple... just like in japan.
I bet Universal was demanding a slice of the per-portable pie, along the lines of the pirate tax that Microsoft paid. And probably something on a sliding scale built off profit-margin or capacity.
Universal can go exclusive with Microsoft if it wants, but their bottom line will evaporate.
IMO Apple should announce that they're dropping DRM altogether, that all new contracts will be for DRM-free music only and then advertise the hell out of how consumer-unfriendly DRM is.
Most iPod owners aren't buying music online.
At this point the iPod doesn't need a huge library on iTunes.
@ Roc
" Most iPod owners aren't buying music online.
At this point the iPod doesn't need a huge library on iTunes."
Uhhhh, then how did they move into 3rd place in june with music sales behind best buy and walmart and outpacing Amazon?
http://www.techspot.com/news/25830-iTunes-number-3-in-US-for-music-sales.html
Must be those couple of modded brown Zunes doing all the damage. : )
Back to the thread..., Don't renew with universal..., let them sink or swim.
Both will be hurt, but Apple has a bigger war chest...., uhhhh and meaner lawyers...., Do I see a cage match coming on?
...so this either means increased competition or Universal Music is destroying itself... I'm cool with either.
Good Riddance to bad rubbish.
Did Universal not read the latest sound scan numbers? Album sales down 15% digital music sales up 49% over last year...and who ,pray tell, does Universal think the majority of those purchases come from?
These idiots seem to think a large majority of ipod owners are going to chuck their ipods for Zune's or buy CD's to get Universal content. When in actuality those folks will probably go back to burning it just to put on their ipods.
If I was Apple I wouldn't bat an eye, I'd quietly begin working an easy way for artists to distribute their music directly through itunes.
"Macworld UK reports that in addition to variable pricing, Universal wants to be able to offer certain tracks and certain bands exclusively through other, competing online music services, in an effort to lessen Apple’s control of online music sales."
Variable pricing is cool! How about making music cost more on alternate Tuesdays, you know, unless the moon is full -- something like that? That's what consumers are BEGGING for -- MORE COMPLICATION. Buy three tracks for the price of four and get one track free!
And certain tracks through certain retailers -- hmm, how about you offer the EVEN-numbered tracks on iTunes, and the ODD-numbered tracks in the Zune Marketplace! That way people will have to buy BOTH! You can even put some special "hidden bonus tracks" in the Sony Connect store, then people will have to buy memory sticks too!
Unless, of course, it's an alternate Tuesday.
Um...iTunes already gets oodles of "iTunes" exclusives that aren't even released to hard media like in-store albums. Universal is just trying to say "we want the right to do this with other stores." God forbid someone say Apple's business practice isn't good for their business.
Sorry, Miguel, I'm not seeing Universal as a victim here. I seriously doubt that significant percentage of Universal's revenue stream is "iTunes Exclusives" -- but if you have supporting facts, please post references.
And what about the pricing? Universal's "freedom" to charge MORE MONEY for popular tracks is not a win for the consumer.
Universal is trying to answer question: Is iTunes the third largest music retailer because of the content offered or because of the customer base?
They could release something as an exclusive download on some other service, and everyone will then know the real power of iTunes. Either the non-iTunes exclusive sells well, and Universal can go ahead and release more content elsewhere. Or the the exclusive release sells poorly until its available on iTunes, demonstrating the power of iTunes. It was inevitable that a content provider would attempt to break th iTunes monopoly.
"All they know is, I was able to get my favorite artist, now I can't. Why? Oh, iTunes doesn't have it, lets see who does, oh, Zune Marketplace does, I will get it there. "
I dont think ANYONE would say that!!!! LOL! There are a ton of other cooler alternitives! O and the iPhone has already sold more then the zune!!!! AHHHHAHAHAHAHAH
This message has been brought to you by a random outbreak of fanboyness®
Sorry Im not normally like this...it just hit me and i couldnt resist the urge, here ill counter myself: LOL APPLE FANBOY NERD!!! WINDOWS HAS SOLD 100S OF MILLIONS MORE COPIES THE OS FREAKING X!!!!! LOL@APPLEFANBOY!!!!!!!!!!! See now everyones happy!
Sadly this means the consumer loses. I have resisted illegally downloading music and keeping myself clear of those pesky RIAA bottom feeders, buy using iTunes. I feel that $0.99 fair price for one song. I love the fact I don't have to buy the "filler" on every album that the record labels try to force down our throats. I don't want to subscribe to multiple music services and have to maintain multiple accounts, and folders. I don't see how this makes sense for Universal. Do they really want to say no to hundreds of millions of dollars in revenue? :shrug:
All this will do is make me buy less music and possibly fall into the dark side.
Let's remember that Apple created the digital music market -they worked hard, innovated, made great products and a great simple shopping experience....so let's be clear Apple are not the bad guys in this scenario...all they did was give people some great stuff...so they want a uniform pricing model - good that's fair and simple...honest...they even want DRM free - again fair and honest..
As per usual Apple led the way and now Universal thinks it can do the same and is probably gearing up to go it alone in the next 18 months with some second rate junk web shop based on a Microsoft DRM - probably even subscription. Nothing they'd like more than to own your music in perpetutiy for the rest of your natural born life....However, the Idiots might just manage to bankrupt themselves if they try that...
What won't stand is that the artists that universal hold back from iTunes will go ballistic when they have to sit and watch the artists on the universal free itunes go stellar...
All I can say is that this news is completely irrelevent. Until DRM is gone from all online music sales, WHO CARES!?!
Everyone is saying "oooh bad for Apple" but I don't see how this is good for Universal. They are wanting to remove their roster from the largest online retailer, and the 3rd largest retailer overall?
This is a mistake, and their artists will not stand for it.
This is all just posturing and maneuvering for the largest possible concession. If Apple is smart they will stick to their guns. There is no way Universal will go exclusive with someone else.
iTunes has reached the point where they control the largest nozzle for a great many music consumers. Cutting yourself off from that nozzle for an "exclusive" with a much smaller nozzle would be a profoundly bad business decision.
It would be like canceling your CD deals with Wal-Mart and Best Buy, and only selling through Sam Goody. (Or something, you get the idea).
I - for one - bought more than a few tracks from the iTunes store and if Universal want to stop selling to me than that is fine. I'll spend my money elsewhere, on the iTunes store, from people who appreciate my business...
(and seems like 87.5% in this room - in the Netherlands - of 32 people agree and will do the same...)
I rather pay a monthly subscription than pay $1 for a song I will no longer want in month!! I hate iTunes for that. who the hell will want to listen to a song that was sweet when it came out but now sucks? I also like that I can download a song I normally wouldn't listen to because I wouldn't want to waste $1 on that song. I have discovered so many new bands because I just download anything I can!
This can be potentially dangerous to apple, if ms took universals offer yet charged just cent less, some people would go for the more cost affective deal although its only a cent. Remember also universal have their nice logo on trailers and films.
meh. Screw Universal. If they won'tlet me buy their music the way i want to (iTunes Store at $0.99) then i won't be buying their music at all.
What exactly is the point of pulling out of the 3rd largest music retailer? So there can be even less legitimate ways to purchase their music? sounds like a fantastic way to try and fight the "pirating problem".
Does anybody who comments care to notice the fact that Universal is NOT pulling their media off of ITunes? I say smart on Universal's part. Now they are free to market exclusivity to the highest bidder. Even though it may not be a significant portion of their revenue putting themselves into position to possibly profit more is a no-brainer.
Think of it this way. When I first bought my cell phone, I signed a two year contract to get the phone I wanted. The cost of getting in the door was a "long-term" contract. When ITunes was just gaining popularity I'll bet universal did the same thing.
Now that my two year contract is up, and I'm happy where I'm at, I see no reason to sign another 2 year contract. I go month to month, if some better deal comes along, I'm able to take it, if not...oh well, I'm happy where I'm at. I'm sure Universal is thinking the same thing
I see no reason why they should sign a new agreement and limit their options when there seems to be no incentive to do so.
Better buy out all your Bon Jovi stuff now, or hope they split from Universal, this maybe either one less group of middle men or bye bye to alot of music.
iTunes store has frustrated me since I have made purchases that I cannot transfer seamlessly from one computer to another (home to work, etc.) and when my hard drive crashed at home, I restored my music only to find the songs would not play because I had used up my "limit" of computers that are allowed. No more...I suggest downloading from mp3stor, where the downloads are easy, you actually "own" the songs you buy, the quality and selection are better, and an album only costs about $2 - $3. And yes it is legal.
http://www.mp3stor.com/
All this iTunes mumbo jumbo makes me cringe.
ipod+itunes(buying music) = expensive
any other mp3 player + napster(leasing music) = cheap
I hate iTunes with a passion. Why pay for a song for 99 cents and come to hate it and want your money back! Opps, to bad, cant. Napster allows you to use the music on most non-ipod mp3 players and its only 15 dollars a month for unlimited downloads and plays!!! With itunes, you get 15 songs for 15 bucks and thats it! Ive downloaded, transfered and listened to freely on my PC and MP3 player over 4000 songs from Napsters service! If i did that on iTunes i would be in debt up to my ears for music!
I just do not like the fact that in order to use your ipod you HAVE to have itunes installed to put music on it. I do not think that is fair to the consumer at all. No wonder Apple is getting sued for the whole iPod+iTunes.
http://www.computerworld.com/action/article.do?command=viewArticleBasic&articleId=9006985
http://www.macworld.co.uk/ipod-itunes/news/index.cfm?newsid=16818&pagtype=allchandate
I also hate how people think the ipod is so different from any other players, like the ZUNE, Creatives players and others. THEY ALL PLAY MUSIC! I cringe at the sound of 'iPod' when i hear it.
Steve Jobs is calling on the music labels to drop DRM copyright controls and sell unprotected music online.
In a rare open letter posted to Apple's site entitled Thoughts on Music, Jobs writes:
"Imagine a world where every online store sells DRM-free music encoded in open licensable formats. In such a world, any player can play music purchased from any store, and any store can sell music which is playable on all players. This is clearly the best alternative for consumers, and Apple would embrace it in a heartbeat. If the big four music companies would license Apple their music without the requirement that it be protected with a DRM, we would switch to selling only DRM-free music on our iTunes store."
He continues:
"Why would the big four music companies agree to let Apple and others distribute their music without using DRM systems to protect it? The simplest answer is because DRMs haven't worked, and may never work, to halt music piracy. Though the big four music companies require that all their music sold online be protected with DRMs, these same music companies continue to sell billions of CDs a year which contain completely unprotected music. That's right! No DRM system was ever developed for the CD, so all the music distributed on CDs can be easily uploaded to the Internet, then (illegally) downloaded and played on any computer or player."
The note seems to be partly in response to European governments' attempts to force Apple to open iTunes. Jobs says their efforts are should be targeted at the music labels.
"Much of the concern over DRM systems has arisen in European countries. Perhaps those unhappy with the current situation should redirect their energies towards persuading the music companies to sell their music DRM-free. For Europeans, two and a half of the big four music companies are located right in their backyard. The largest, Universal, is 100% owned by Vivendi, a French company. EMI is a British company, and Sony BMG is 50% owned by Bertelsmann, a German company. Convincing them to license their music to Apple and others DRM-free will create a truly interoperable music marketplace. Apple will embrace this wholeheartedly."
@Fivedollarones
Stop paying the $15 a month. You won't be able to play even 1 of the 4000 songs you downloaded from Napster. I'd rather pay the buck and own one song than rent thousands.
@Fivedollarones
Where did all of this DRM nonsense really start with music distribution? iTunes maybe? Nice to see Jobs creating the problem and becoming the savior to fix it.
Now there's some marketing for ya.
@ andrew
You dont understand, i listen to all of it. Why would i go into debt or spend 4000 dollars on music when i can pay 180 dollars a year and have access to all the new music when i want and listen and play what i want when i want. Its 192kbs, great reliable speed, no viruses like edonkey and that crap. Benifits outweight the small 15 dollars a month. I find more value in it that any other online music distributor.
Plus if you search a little, windows media DRM is crackable so i can still play it all even if i stopped paying...
@ Fivedollarones,
It's your prerogative if you prefer to rent music but don't think for a moment it's a less restrictive model than owing music. You have to keep paying the monthly dues and you can't move the music between players or burn to a disc.
The least restirctive setup is iTunes where Apple negotiated a way for consumers to LEGALLY burn their audio to discs and move between devices and alter encoding formats. Now with the higher bitrate DRM-free options it has become even better. Now before you jump on the "CD have no DRM and ca be burned blah blah blah" the RIAA specifically states that you are not allowed by law to convert your audio into a different format or move to a different medium such as an iPod. OF course, the RIAA can't do anythign about this but it does technically make iTunes the only legal method in the US for doing such conversions.
@ Evan,
Don't spread FUD. Apple didn't create DRM. DRM was on DVDs, Windows Media, Real Player, and even poorly devised for CDs. The standard for audio on Compact Discs was devised and set in stone by Sony and Phillips long before personal computing and the internet became household terms. Later attempts to regain control of the music industry failed with Sony's MiniDisc and ATRAC, and may others.
@ jeve Sobs
" Were Ron Popeil and Jobs separated at birth ?
I hope Universal puts the screws to the Jue and makes him give up more money."
Uhhhh, yeah...., it's called successful and rich, which they both are.
Well if you are going to throw a race card into your post, you should at least know how to spell it. It's spelled Jew..., not jue,
and by all accounts, Bronfman Jr., the head of universal music is the son of Edgar Miles Bronfman and the grandson of Samuel Bronfman, one of the most wealthy and influential Jewish families in Canada. (wp)
The people who buy most of Universals catalog are the same superficial (and lazy) people who buy iPods and use iTunes, so it makes me wonder what these people will do if Universal pulls out. Will they jump ship from iTunes for their somewhat catchy soul-less music, or will they stay for convenience and lack of knowledge of alternative digital distributors? Oh the questions.
So Apple just outright LIED once again just a couple days ago and said the Rumor was not true. Gezz, Apple may not be so Special after all. Lier's and copyright Stealer's. Of course we'll see Higher prices for Music which I though at .99 cents was ALREADY to much money. Really there's no CD, No Cover Art, Your not really saving any money, and in fact may end up spending more then just buying a CD. Plus now you have DRM garbage. WHY? It's such a RIP already. You know what it is though, they think they can make so much more money because of all the DUMB people that buy these $1.99 Cell phone Ring Tones and they aren't even a complete Song and of lower Quality. So if they can get that much for that garbage, they must at the very least get that much for a Normal Song track. That's their thinking on the matter.
I've Stopped buying Cd's quite a few years ago. I've gotten like 2 in the last 4 years. I used to buy quite a few I have 200-300 Cd's and I hardly use them now. I won't buy a IPOD or any other type of device like that. I'm not going to waste my money on .99 cents a song. That can get quite costly and DRM on top of it just blows, and I'm sure not going to pay even more money even if the DRM is removed. Nope, I've been a XM Radio Subscriber since as long as it's been around. The $12.95 a month is a Bargain. For the price of 1 CD or less, I can tune into all kinds of Music let alone all the other stuff also. It's great. Not having to fork out all this money for IPODS and TUNES, No having to manage Files, and play lists. Don't have to buy NEW Music, it's already being played. I hear a lot of old stuff, and stuff I would normally not know about but like that I would never hear on a IPOD because I didn't put it there.
If you want, you can get a Combo Satellite Portable Receiver and MP3 player to keep some of your Favorite tunes on to play whenever you want. I have my Skyfi 2. Plug it into the Home dock while I'm at home. It has a FM transmitter and my Shower Radio will pick it up. Plug it into my Truck and now I can tune it on the Go, and Plug it directly into my Boombox and Work also. I can no longer stand to tune into a FM Radio Station. It's just seems like all it is, is non-stop Commercials. I have my DVR's for TV, and have my XM Satellite Radio during the other times.
Apple didn't lie, the rumour was that Universal willnot be renewing their contract. Univesral did renew after all, but on a month-by-month basis.
Now Microsoft can start moving in for the kill.
In all honesty, I don't dislike Apple, but this clearly signifies that there'll be room for more BIG players behind the reigns than just Apple, and I like that.
After a couple months, I sold my iPod on eBay after removing my 100% of my non-iTunes purchased music. I wouldn't buy any tracks on iTunes and I won't be buying the iPhone. If Universal releases some hot CDs I'll be buying them and ripping to FLAC and playing on the PC via musikCube. CDs still outsell downloads. Lossless is the future. Apple and its fanboys are a bunch of biters.