Universal Music Group's iTunes Contract

[MacRumors]

The Wall Street Journal is reporting that Universal Music Group is set to notify Apple that it will not be renewing their long term contract to sell digital music through Apple's iTunes Store. Instead they will continue with a "short-term" sales agreement, which would mean Universal's catalog would remain on iTunes for the time being.

Though it is unlikely to have sweeping effects immediately, the change could give Universal more flexibility in its dealings with competitors to iTunes -- for instance enabling the company to offer other digital download stores parts of its catalog exclusively to other services.

The exact impact of shift is not entirely clear, but record labels have been reportedly concerned with Apple's increasing dominance in digital music sales.

[Peace]

Sounds more like a bargaining tool to get Apple to charge more for downloads.

[bytethese]

I wonder what this means for Ringtones, if any, on the iPhone.

Why wouldn't they want to position themselves on the long term with the #3 music retailer in the US?

[narco]

Damn, these labels are totally clueless.

Fishes,
narco.

[Fuchal]

They must hate that they are selling so much music. We should all go back to using peer-to-peer networks to make them happy.

[HiRez]

I'm kind of surprised the record labels haven't all gotten together and formed their own music store, locking out the others and splitting the profits amongst themselves. They'd get 100% of the profits (minus technical overhead) and could control pricing and any other factors they wanted to.

[Grimace]

uhoh. hopefully the price of AAPL won't plumment tomorrow. I was hoping that we'd have sales numbers from the iPhone.

[Kingsly]

Dont they realize how much something like this could hurt them? The results are in: iTunes is best digital music store around!

[bommai]

Universal Music is still owned by the French company right. I don't think it is part of Universal Studios which is now owned by GE (NBC). Isn't Universal Music the one that is getting money for every zune sold. May be they want the same deal from Apple too!! Yeah right.

[thevofl]

Originally Posted by narco

Damn, these labels are totally clueless.

Fishes,
narco.

Completely and utterly clueless

[Bosunsfate]

So, Apple is the dominant player?

What music company is stepping up to stop the Wal-mart machine?

Is this just a case with Universal trying to take out their frustration on someone they can maybe push around?

[BigJohno]

This doesnt make any sense... Dont they want itunes to dominate which would in turn mean more money for them????

[kinless]

Bye Universal. Don't let the door hit your ass on the way out.

We don't need your kind around here.

[Steve1496]

Bad move. Who makes the decisions at these record companies? iTunes is the 3rd largest music retailer, and Universal doesn't want a good relationship with Apple.

Bad move Universal!

[Object-X]

What other services?

[Pants Dragon]

Not a smart move. I somehow doubt Steve will let that stand. You're either in on his terms or out.

[puckhead193]

yawn...they just want apple to charge more but in the end they will realize how important itunes is and will stay the same...i'm not worried one bit

[zim]

oh no Apple, Please don't sell our music with no expense to us. Please don't make us money while we can sit back on our fat

And to think, I was reading an article the other day that suggested that the music industry had learned their lesson

[AlBDamned]

Bite. Hand. Feed. Typical.

[blueflame]

This is a bunch of bull. From my understanding, it is not as if the record labels are losing money by selling online. I do agree that this is a bargaining tool so they can sell more exclusive deals to other providers, but I do not see them trying to particularly single out itunes. iTunes being the #3 is a very good place for them. it is their digital wallmart. No one complains about wallmart prices, and the record companies love it. lots of money.
I think everyone is trying to demonize (partially rightfully) the record industry. While I do think that they are scummy, I think some of this criticism is pretty much made up by us fanboys with media frenzy help.
just my thoughts.

[thevofl]

<sarcasm>

I guess I will have to run and buy a Universal CD at Best Buy.

</sarcasm>

[Bosunsfate]

Originally Posted by HiRez

I'm kind of surprised the record labels haven't all gotten together and formed their own music store, locking out the others and splitting the profits amongst themselves. They'd get 100% of the profits (minus technical overhead) and could control pricing and any other factors they wanted to.

Monopoly for one. No way they could ever agree for two.

[LloydBraun89]

They're just a bunch of damn fools if you ask me.

[Flipstar]

Maybe the sharing of Zune revenue is working out for them.

I guess they're thinking Apple is getting too powerful in the digital music arena.

[iMeowbot]

Originally Posted by bommai

Universal Music is still owned by the French company right.

Right, Vivendi. They actually spun off the water business a few years ago, entertainment is their main thing now.

Originally Posted by HiRez

I'm kind of surprised the record labels haven't all gotten together and formed their own music store, locking out the others and splitting the profits amongst themselves.

Early on, they did try that. Vivendi actually bought mp3.com several years ago and never figured out what to do with it. BMG snapped up Napster a little earlier and also couldn't figure out what to do with it. Warner, BMG and EMi got together and failed to figure out how to make it work with MusicNet. Oh, and UMG and Sony tried and failed to do this with Pressplay, the wreckage of which became the current Roxio-backed incarnation of Napster.