Universal wants more control


Fails to renew annual contract with Apple
Not exactly surprising, but I wonder if Universal will be able to pull this off.

The Universal Music Group of Vivendi, the world’s biggest music corporation, last week notified Apple that it will not renew its annual contract to sell music through iTunes, according to executives briefed on the issue who asked for anonymity because negotiations between the companies are confidential.

Instead, Universal said that it would market music to Apple at will, a move that could allow Universal to remove its songs from the iTunes service on short notice if the two sides do not agree on pricing or other terms in the future, these executives said.

Before iTunes, no label was able to make music downloads profitable. All the major labels wanted so many restrictions on what the customer could have that it was almost counterproductive to use them.

Apple made it easy on the customer and profitable for the labels. Even now, the argument is over the amount of profit.

If Universal can convince people to buy downloads on their terms, more power to them. I believe in consumer choice.

But if they don't. they will have to accept Apple's terms. That will make Apple even more dominant in the industry. And with movie downloads gearing up, that could be very risky.

Funny thing is, the customer wins. More choice, more options, and more customer focus. Which is something that the music labels and movie studios have been forgetting.

Remember, Apple doesn't profit very much on iTunes. That is because Apple is selling hardware using the user experience as the vehicle. Even if Universal pulls it's catalog today, I can still buy a CD and put the music on my computers and iPod. Unless Universal tries for even more control and sells non-standard malware discs like Sony tried.

— NeoWayland

Posted: Tue - July 3, 2007 at 05:05 AM  Tag


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