Universal Threatens To Take Its Music And Go Home

from the my-tunes dept

Mon, Jul 2nd 2007 10:09am — Joseph Weisenthal

While Apple basks in the glow of a successful product launch, the company may have a fresh fire to put out. According to reports, record label Universal has decided not to renew its contract with the company that allows its songs to be sold on iTunes. The label's music may still remain on iTunes after the current contract expires, but Universal will have the right to withdraw it at any time. There's a good chance that Universal is simply posturing here, as it would be hurting itself significantly if it stopped selling on iTunes, which has become the third largest music retailer in the country. That being said, tension between the labels and Apple has been brewing for quite some time, as many labels have been unhappy with Apple's stance on song pricing. Of course, the labels have only themselves to blame for getting into this mess. Their insistence on selling DRM'd tracks is what has allowed Apple to establish and keep its dominance in online music, which in turn gives it the upper hand in these negotiations. If Universal really wanted to stick it to Apple, it wouldn't withdraw its music, but it would find another outlet to sell unprotected MP3s that can play on consumers' iPods. More than anything else, that would force Apple to respond to its demands.

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23 Comments

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Brian, 2 Jul 2007 @ 10:55am

Petulant Children...
Everyday the recording industry demonstrates more and more that they are nothing more than petulant children. We want it our way or we're taking our toys and going home. I'm 100 percent for legal music...I don't pirate anything...but goddamn it--don't keep pushing. $.99 is borderline theivery for a single track but I pay it to keep a clear conscience. One penny more and they will lose me forever...and I have over 200gb of legal music (CDs/vinyl/iTunes). But they don't care about me, do they...only lining their pockets. I'm flabbergasted.
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Jonathan, 2 Jul 2007 @ 10:58am

leverage
The magic word is... leverage!

What kind of leverage could Universal possibly have to get Apple to change its stance on song prices? None. They have no leverage, and without this magic opinion-swaying implement of economic influence, Universal can't make Apple change its pricing scheme by withdrawing UMG music. People will still go to iTunes to buy music, and Universal will simply cut itself out the most major portion of the digital marketplace.

Avoiding the digital marketplace - that sounds a lot like what the music industry has been trying to do for years.
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Stephen, 2 Jul 2007 @ 11:25am

one wonders...
1. Who is on Universal? No one cares about the label, only the bands. Their being yanked from iTunes is what Universal should mention.

2. Of course, doing this might get the bands irate, then Universal would have a real situation. It would be interesting to see which Universal acts are the top acts on iTunes--and who climbs up the charts as a result of their being pulled.

3. Who is more petulant: Universal or the British record stores complaining about the Prince giveaway?
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Oliver Wendell Jones, 2 Jul 2007 @ 11:28am

Typo...
The article linked says that Universal has chosen not to "renew" their contract, which is different than "review" as you have in your story, Mike... :-)
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Curious..., 2 Jul 2007 @ 11:36am

Makes me wonder
Is this Universal posturing for a better deal or are they caving to pressure from the fellow RIAA members and getting ready to do a foolish about-face?
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Overcast, 2 Jul 2007 @ 11:41am

LOL,
Good Riddance - don't let the door hit you on the way out.

I agree too - I couldn't tell you even ONE band offhand that records with them. I'm sure *many* do - but do I pay attention which recording company markets the record? Ummm, no.

Can you tell me which paper company makes your drink cup at a restaurant? Umm, doubtful - unless you work in my industry.

Does it even matter??? lol, no - of course not.
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Jonathan, 2 Jul 2007 @ 11:50am

bands
Lets think about artists that record under UMG...

How about the biggest iPod sell-out promoter ever: U2.
And the worst of the revived '80s bands that used to be great: Bon Jovi

I think they've both had a few record sales in the last few years.
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Jasmyn, 2 Jul 2007 @ 11:50am

Who Moved Universal's Cheese?
Open letter to the hacks and suits at Universal:

Yes, your cheese has been moved. The music buyers moved it when they decided to start paying .99 cents a song from Itunes. Yippee! Now, when 14 out of 15 songs on a $20 music CD suck, consumers have opted to pay 99 cents to Itunes so they can buy the one song they really want to hear.

I pay for my music, and I'll never go into a retail store and pay full price, ever again. If I want the whole CD, I'll buy it second-hand from Amazon or Ebay, if it's cheaper than buying all the songs from Itunes. And if you manage to strong-arm Apple into charging higher prices for their music, then I'll just stand in line with message writer #1, and I'll download the fucking music off a pirate website.
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Sanguine Dream, 2 Jul 2007 @ 11:55am

If I were Apple...
I'd use this chance to make an example out of a major recording label. I would just answer their threat by dropping all UMG music from iTunes altogether. From there I would just let the artists start asking why their music is no longer on iTunes. Let's see how good of a bargaining postion UMG would be in if a few of their big names dropped off their label...
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txjump, 2 Jul 2007 @ 12:11pm

future
i went to the umg website and checked out their list of "featured" artist and there are quite a few i recognized.

but if i cant get their music, i could just find something else i like for $.99. and when the major artists start looking around for their next label because they've heard the stories...im sure they will find someone else to do the job.

the flip side is if umg does manage to do something better for their artists...but, as is well known, the music industry doesnt really have the kind of reputation you would expect fresh ideas from.
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Tipu, 2 Jul 2007 @ 12:26pm

Why would aple care
I disagree with the last statement. If Universal finds another outlet for unprotected MP3s apple does not care. Apple is anyways loosing money (or breaking even) on the music they sell through iTunes. And they already say that almost all of the music on an ipod is unprotected (i.e. not bought from iTunes).
Apple will be hurt if Universal stops providing the songs online at all or provides it through a non-apple compatible DRM but Universal will be hurt more from that. So the only option Universal has is to stop digital downloads of its songs or provide them through another DRM scheme (Zune etc.) not playable on ipods.
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Anonymous Coward, 2 Jul 2007 @ 1:18pm

Sadly, the fact is...
that LimeWire seems quite popular among young people. People who buy their music do it because it is legal. I don't advocate piracy, but stupid behavior on UMG's part is simply driving people to it, as does DRM. If UMG had an ounce of sense, they'd let iTunes sell their songs for 99 cents with no DRM. I know one young man who stopped buying music because he lost his licenses during a Windows failure. I would force him to buy his music, but I don't because he stands to lose his investment over a stupid DRM scheme...
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piariting freak, 2 Jul 2007 @ 1:33pm

never pay
i would just like to say, that anyone who has ever paid for a song/cd/game/software/ or whatever else that is potentially downloadable (with a few min of searching on torrent sites), is, im sorry to say stupid.

there is no reason u can give me to prove, convince, or tell me that im right, that anything should be paid for which is web/computer based.
ALL web based firms should (ie those that have a website) should have by know understood the concept of GOOGLE...ie free for all....but still one of the riches countries in the world....

anyway....i have over 700 GB of music...i doubt ill ever listen to even a 10th of it...but the fact that i have it makes me feel good....plus i know if anyone ever comes over i will have whatever they want to listen to....

one last point why i would never pay for music.....

if u think 50 cent...eminiem....snoop, shakira, will smith...or who ever else who makes music, videos or whatever deserves all the money they get....then ur an idito...
when 2 billion people earn less then 1 dollar a day and those guys have 20 cars which they cant decide whicht o pick or use.....
f*ck so many thoughts through my head about how much i disagree with paying.....that ah frustration

hope no one pays again
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Xanius, 2 Jul 2007 @ 2:28pm

Re: never pay
All I have to say is you're an idiot.
I'm all for buying programs and games, the people that code them spend hundreds of hours sitting in front of a computer writing the thing so you can either make your stick figure pictures(because that's all a simpleton like you could draw) or have hours of entertainment playing My little pony happy fun land.

There's nothing wrong with supporting companies that take care of the people working for them, you know everyone outside of the record industry. I don't go to many movies because 95% of the movies suck and aren't worth the money. And I only buy CDs of bands I know are on independent labels so they will get a decent chunk of the sales.

I'd prefer less copy protection on the games I buy but with the companies that make the protection telling the game companies that it is working it won't go away.
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Mark, 2 Jul 2007 @ 2:54pm

Re: one wonders...
UMG is quite large:

North America: Akon, Erykah Badu, Beck, Black Eyed Peas, Mary J. Blige, blink-182, Bon Jovi, Mariah Carey, Sheryl Crow, D-12, Daddy Yankee, Dr. Dre, Eminem, Melissa Etheridge, Eve, Fall Out Boy, 50 Cent, The Game, G-Unit, Vince Gill, Godsmack, Hoobastank, India.Arie, Jack Johnson, Jay-Z, The Killers, Diana Krall, Ludacris, Reba McEntire, Nelly, No Doubt, Puddle of Mudd, Pusscat Dolls, Ashlee Simpson, Snoop Dogg, Gwen Stefani, George Strait, Sugarland, Shania Twain, Stevie Wonder, Sting, 3 Doors Down, Weezer, and Kanye West.

Europe: Bryan Adams, A-Ha, Daniel Bedingfield, Marco Borsato, Calogero, The Cardigans, Sergio Dalma, Ms. Dynamite, ERA, Mylene Farmer, Gabrielle, Girls Aloud, The Hives, Elton John, Jovanotti, Juli, Kaiser Chiefs, Keane, Ronan Keating, Michael McDonald, McFly, Metallica (outside North America), Noir Désir, Florent Pagny, Paco de Lucia, Rammstein, Rosana, Rosenstolz, the Rasmus, Safri Duo, Michel Sardou, Scissor Sisters, Snow Patrol, Sugababes, Tamara, t.A.T.u, Texas, U2, Paul van Dyk, and Zucchero.

Latin America: Babasonicos, Bersuit, David Bisbal, Café Tacuba, Christian Castro, Don Omar, Pedro Fernandez, Luis Fonsi, Enrique Iglesias, Juanes, Luney Tunes, Molotov, Zeca Pagodinho, Paulina Rubio, Sandy & Junior, Ivete Sangalo, Caetano Veloso, Alicia Villarreal, and Wisin y Yandel.

Asia Pacific: AI, Chage & Aska, Eason Chan, Jacky Cheung, Kelly Chen, Dreams Come True, Energy, Bernard Fanning, Masaharu Fukuyama, Evonne Hsu, Dao Lang, Hacken Lee, Naotaro Moriyama, Wilbur Pang, Powderfinger, Rain, Kou Shibasaki, Spitz, Alan Tam, Utada, WaT, Wolfmother, and Masayoshi Yamazaki.
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Anonymous Coward, 2 Jul 2007 @ 3:49pm

Re: Petulant Children...
99c is borderline thievery for a single track? What. The. Crap. Seriously, what the hell? $1 is a freakin' bargain for a single track.
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Lawrence D'Oliveiro, 2 Jul 2007 @ 6:11pm

iTMS is peanuts
So the iTunes Music Store is the third-largest music retailer in the US. Big deal. Worldwide, legit music downloads are still peanuts compared to, say, the ringtone business. It's been previously reported that the average iPod owner only buys maybe a couple of dozen tracks from iTMS--the vast majority of music on their iPod comes from other sources.
So Universal pulls out of iTMS. This is more symbolic than anything else: Apple doesn't lose much (it doesn't make much on iTMS sales), and maybe Universal loses a bit of profit from that source. So Universal loses more than Apple does, but overall it's still small potatoes. Why should there be much of an impact on anything?
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Mojo, 2 Jul 2007 @ 6:12pm

With digital delivery, the music companies now have ZERO manufacturing and distributing costs; I'd have to agree that $10 a CD is pushing it.
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Joe Smith, 2 Jul 2007 @ 11:47pm

What options??
UMG is saying they are doing this to keep their options open in case a new system comes along. So say someone decides to launch a new system and charge $2.00 per track and give more to the record companies. How is that new service ever going to break into the market? They won't have the cachet that Apple does and they won't have the customer tie-in that Apple does when someone buys an iPod.

To even have a chance of making it work UMG and the other record companies would have to pull out of iTunes go to the new more expensive service and hope the customers follow. Chances of the customers following are pretty low. I wonder what Apple would be like to negotiate with if UMG decided to go back to iTunes after the new service fails.
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mike allen, 3 Jul 2007 @ 12:41am

when will they learn
That they are pricing themselves out of the market they did it with CDs even vynal and now trying to screw their customers again on the internet. then they expect you to pay again for the same track to play on other equipment or in the car Stupid or what.
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YouKnowNothing, 3 Jul 2007 @ 6:30am

Re: Re: Petulant Children...
Not to me. I've set my price at $0.25 per track. That's what it's worth to me and that's what I'll pay.

Remember, *EVERYTHING* in the ITMS is already available *FOR FREE* elsewhere on the internet. If they want my business, they'll need to adopt an AllOfMp3-type model, where I get to set the format and bitrate, and no DRM.

That works out to about $0.25 per track. Until then...well, there are torrents of other folks who feel the same way I do.
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YouKnowNothing, 3 Jul 2007 @ 6:34am

Re: bands
If U2 and Bon Jovi never recorded and/or released another scintilla of music again in my lifetime, I'd die a happy man.

Popular (selling lots of records) != good.
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jackie113, 10 Jul 2007 @ 3:41am

60606
Apple TV puts your iTunes library — movies, TV shows, music, and podcasts on your TV. And your digital photos appear in high definition, so you can put on a big-screen slideshow. With up to 200 hours of video, 36,000 songs, or 25,000 photos at your command, there’s always something good on TV.

www.mp4-converter.net/apple-tv-converter/
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