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Universal Music Group says no more iTunes?
Dublo7
Registered User regular
Registered User regular
Just came across this:
It's from the Drudge report, but apparently it's a story that just came to light.
UMG to reject iTunes? This is pretty big news. Wasn't the UMG deal the factor that currently makes iTunes so huge?
If I find out more about this, I'll edit it and post.
FLASH: APPLE FACES A REBELLION OVER ITUNES... Universal Music Group, the world's biggest music corporation, notified Apple that it will not renew its annual contract to sell music through iTunes... Developing...
Universal Music May Seek Contract With Shorter Term for iTunes Sales
By Ethan Smith and Nick Wingfield
Word Count: 269 | Companies Featured in This Article: Apple, Vivendi, Wal-Mart Stores, Best Buy
Highlighting continuing tension between the music industry and Apple Inc., Vivendi SA's Universal Music Group is considering notifying the Cupertino, Calif., company that it isn't renewing a long-term contract to sell digital music downloads through the increasingly powerful iTunes Store, according to a person familiar with the situation.
Wall Street Journal.
July 2, 2007
Universal in Dispute With Apple Over iTunes
By JEFF LEEDS
Steven P. Jobs, the co-founder and chief executive of Apple, is an emerging force in the mobile phone business, thanks to the snaking lines of gadget fans who queued up last week to buy the iPhone. But now he faces a headache in an industry Apple already dominates — digital music.
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.
Universal’s roster of artists includes stars like U2, Akon and Amy Winehouse.
Representatives for Universal and Apple declined to comment. The move, which comes after a standoff in negotiations, is likely to be regarded in the music industry as a boiling over of the long-simmering tensions between Mr. Jobs and the major record labels.
With the shift, Universal appears to be aiming to regain a bit of leverage — although at the risk of provoking a showdown with Mr. Jobs.
In the four years since iTunes popularized the sale of music online, many in the music business have become discouraged by what they consider to be the near-monopoly that Mr. Jobs has held in the digital sector — the one part of the music business that is showing significant growth. In particular, Mr. Jobs’s stance on song pricing and the iPod’s lack of compatibility with music services other than iTunes have become points of contention.
By refusing to enter a long-term deal, Universal may continue to press for more favorable terms from Apple or even explore deals to sell its catalog exclusively through other channels. If Universal were to pull its catalog from iTunes, Mr. Jobs would lose access to record labels that collectively account for one out of every three new releases sold in the United States, according to Nielsen SoundScan data.
But if Apple were to decide not to carry Universal’s recordings, the music company would likely sustain a serious blow: sales of digital music through iTunes and other sources accounted for more than 15 percent of Universal’s worldwide revenue in the first quarter, or more than $200 million. (Vivendi does not break out revenue from Apple alone).
If push came to shove and Universal decided to remove its catalog from iTunes, it might not necessarily instigate a broader insurrection against Apple. The second-biggest corporation, Sony BMG Music Entertainment, recently decided to sign a new one-year contract making its catalog available to iTunes, according to executives briefed on the deal. A spokeswoman for the company, a joint venture of Sony and Bertelsmann, declined to comment.
Some industry observers have cautioned against taking on Mr. Jobs directly. “When your customers are iPod addicts, who are you striking back against?,” said Ken Hertz, an entertainment lawyer who represents artists like Beyoncé and the Black Eyed Peas. “The record companies now have to figure out how to stimulate competition without alienating Steve Jobs, and they need to do that while Steve Jobs still has an incentive to keep them at the table.”
But other music industry executives say the major labels must take a harder line with Apple at some point if they are to recalibrate the relationship. In particular, they say, it is unfair for Mr. Jobs to exert tight control over prices and other terms while profiting from the iPod. Mr. Jobs, in February, noted that less than 3 percent of the music on the average iPod was bought from iTunes, leading music executives to speculate that the devices in many instances are used to store pirated songs. (Of course, users can also fill their players with songs copied from their own CD collections.)
Apple has now sold more than 100 million iPods, and the device’s ties to iTunes have helped make Apple the leading seller of digital music by a wide margin. The iTunes service accounts for 76 percent of digital music sales, and the contract talks come as it is on the rise — Apple recently surpassed Amazon.com to become the third-biggest seller of music over all, behind Wal-Mart and Best Buy, according to data from the market research firm NPD.
All of that has transformed Apple into a prominent gatekeeper, wielding influence as a tastemaker by highlighting selected artists on iTunes storefront, and as an architect of the underlying business dynamics.
Apple has stuck to a pricing system that charges a flat 99 cents for a song since iTunes started four years ago (except for the recent introduction of songs without copy protection, which carry a higher price). Mr. Jobs has long argued that a uniform system and low prices will invite new consumers and reduce piracy.
But some music executives have been chafing at the flat rate that Apple has insisted upon in its contracts with the big record labels, and they have been pressing publicly or privately for the right to charge Apple more for popular songs to capitalize on demand or, in the event of special promotions, to charge less. Edgar Bronfman Jr., the chairman of Warner Music Group, reinforced that idea at a recent investor conference, saying “we believe that not every song, not every artist, not every album, is created equal.”
In the backdrop of the pricing dispute is an investigation by European regulators who are studying the roles of the music companies and Apple in setting prices in certain international markets.
At the same time, Mr. Jobs has refused the industry’s calls for Apple to license its proprietary copy restriction software to other manufacturers. Music executives want the software to be shared so that services other than iTunes can sell music that can be played on the iPod, and so that other devices can play songs bought from iTunes.
Mr. Jobs has argued that sharing the software with other companies would increase the likelihood that its protections would be cracked by hackers, among other problems. Instead, he asked the music companies to drop their insistence on copy protection altogether. So far, only one of the four music companies, EMI, has made a deal to sell unrestricted music through iTunes.
ny times
It's from the Drudge report, but apparently it's a story that just came to light.
UMG to reject iTunes? This is pretty big news. Wasn't the UMG deal the factor that currently makes iTunes so huge?
If I find out more about this, I'll edit it and post.
[SIGPIC][/SIGPIC]
Dublo7 on
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UMG includes all record labels like Interscope, Def Jam, Geffen, etc etc.
Personally, I think iTunes, with or without DRM, is a broken model; we just don't yet have a model that properly includes physical possession with the convenience of download without screwing the quality.
But I doubt that's why UMG care, because CD sales are plummeting like a lead balloon.
They probably weren't too happy about a removal of DRM either. But still, removing the easiest way to get ahold of their music is just shooting themselves in the foot. If people can't buy their songs online than odds are they'll turn back to down loading them through P2P.
iTunes is one of the more convenient ways of buying music online, as you can pick up singles rather than a whole album, but moving to a shorter time span is an interesting move.
I would just like to say that digital store exclusivity is BULLSHIT. " No I don't want you to buy my product with your precious money because you don't have THIS mp3 player." Bullshit I say!
But I don't buy music from online regardless, so this doesn't really affect me in any way.
I'm beginning to think they don't want to fix them, for obvious reasons.
I don't know about music from iTunes, but looking through my song collection, I highlight a song, click advanced, and I have a little option that says "Convert Selection to MP3"
I like the store, but the program is bulky, it's awkward and it's unintuitive.
Good luck with that.
Hrmm, as far as I know, UMG is staying on Zune and Napster.
Universal do know how to pick a losing format from a mile away/
Regardless, if this means that the iTunes music store finally dies and gets replaced by a few nice, easy to use web interfaces I'll be much happier.
iTunes is an application which maintains its own database. In order to recognize the songs, iTunes needs to add them into its database.
You have to drag & drop these songs on the iTunes window. You can even use the preferences, so that iTunes doesn't copy the file to its own "directory structure". If you edit files and reimport them to the library its a given that these files (entries) will be duplicated.
Honestly, I don't know how your statement is connected to the whole topic.
Yeah but those are at least just CDs that still work on any CD player. So maybe I have to take a trip to a different store, but at least I don't have to worry about albums that don't work on my stereo because of it isn't brand X. I wouldn't mind labels choosing sides over online music stores if every online music store worked on every mp3 player.
This is a problem the Jobs is trying to overcome, by convincing all the record labels to go with the DRM-free option. The DRM-free files do no have the I-tunes security encryption, so they do not need an iPod to play them, you could put the DRM free stuff on any MP3 player.
I'd like to see them at the same price as other music though, and CD-like quality.
I still buy my music on CDs from discount stores and sites because at least then I get the highest quality I can and I'm paying $5-6 per CD rather than $1+ per track.
I do use iTunes for if I need a single song of something for someone or a special occasion.
Why shouldn't they? They engineered it, they maintain it, they support it, they manufactured it, and they keep it updated. What does Universal do for the iPod? Nothing? Then why should you profit from it?
Who makes that choice? The industry? On what grounds? I recall the story of Jobriath, the industry's "next big thing" that flopped. I think it's best to let the fans choose.
Funny, though. I don't support major labels. None of the labels I regularly buy from have CDs that cost over 15 bucks. They don't DRM their music. And they largely ignore P2P. And they seem to be doin fine. My label included.
UMG should just be taken out of the equation.