Universal Confirms iTunes Contract Change

[MacRumors]

Macworld.co.uk confirms an earlier rumor that Universal would not be renewing their long term contract with Apple fur iTunes music distribution.

"Universal Music Group has decided not to renew its long-term agreement for Apple’s iTunes service. Universal Music Group will now market its music to iTunes in an ‘at will’ capacity, as it does with its other retail partners."

Macworld.co.uk suggests that this Universal may be interested in offering exclusive music to other online services besides iTunes, in an attempt to reduce Apple's control of online music distribution.

Article Link

[Metatron]

prepare to revolt....

What horrible news. Universal is really just hurting themselves in this one.

[LaMerVipere]

No biggie. iTunes customers won't notice a difference.

[yagran]

this is really bad, i hope its not the start of a slippery slope for iTunes

[NeXTCube030]

Originally Posted by yagran

this is really bad, i hope its not the start of a slippery slope for iTunes

From an apple point of view, the concern is whether or not the path from music store to Ipod is 'easier' than music store to [zune|sandisk|rio|whatever] If the competition make it easier to download stuff to a non iPod than to an iPod, thats where it will hurt.

But if I can buy something, load it into iTunes, and upload it into my iPhone,
I can live with the competition, and I think ITMS can too.


What [I hope] Universal will find out, is that if you don't place your product where everyone is going to buy it, you ain't gonna sell it. Do I want to buy music from 2 stores, one with 65% of my music,[ 50% of my movies, and all my podcasts], and the other site that has 30% of my music... I'll probably stop shopping at the Universal store before I stop shopping at iTMS... and do what I do now... dash down to the pawn shop/used book/CD store and look for the music I can't find on ITMS.

What would be great if is all music labels build compatible stores that can be front ended by a single application that can peruse site contents ala pricegrabber.com and use a single credential/purse to buy stuff from... Heck Apple should offer to build that for free like Amazon Shopping... and link it up against ITMS... let the labels build their own libraries, their own price points, and let apple aggregate the shopping cart/experience. Then everyone gets what they want. Of course, if Universal charges $5.00 for the next U2 single, the market will be up in arms, but under their agreements, it's probably 'legal' (weasely, but legal... wait, those are just synonyms).

[dartzorichalcos]

Looks like a bad move for Universal.

[QCassidy352]

meh, guess I won't be buying Universal music. I like itunes more than I like Universal.

[emptyCup]

It will be an interesting, 750 million dollar experiment.

[aria505]

Originally Posted by emptyCup

It will be an interesting, 750 million dollar experiment.

Yes, I'm somewhat excited to watch what happens with this. You know Universal will be tracking the change in their sales.

I wonder if any of Apple's changes in their demands sparked this or if Universal is really just wanting to challenge Apple's power.

[kbmb]

As a consumer I wouldn't be worried. Just think...the first Artist or new album Universal decides not to put on iTunes....that artist won't stand for it.

All this is is Universal wanting more money...and it's ridiculous.

-Kevin

[Diatribe]

Lol. How is this a bad move for Universal? Even Walmart only has a short-term contract with the labels...

[Phobophobia]

These are the same guys who get paid for each Zune sold...

[KindredMAC]

LADIES AND GENTLEMEN!!!!!!!!!!!!!!!!!

START YOUR PIRATING!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

.... idiots.

See Hand....
See Feeding...
See Biting...

...again, idiots.....

[matthutch]

I wonder what impact (if any) this would have on their catalogue currently available through iTunes.

Oh well I guess we will find out shortly.

[weev]

Originally Posted by KindredMAC

LADIES AND GENTLEMEN!!!!!!!!!!!!!!!!!

START YOUR PIRATING!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

.... idiots.

See Hand....
See Feeding...
See Biting...

...again, idiots.....

A torrent we will go, a torrent we will go, high-ho-a-derrio, a torrent we will go...

[rockosmodurnlif]

On the whole, a much better thread than the first one on this news.

On the iTunes monopoly issue, I have to say I remember hearing that of every legal track downloaded some 70% of them come from iTunes. 70% is a big number. iTunes is the number 3 music retailer on the basis of this 70%.

But what does that 70% do? Well not much. They can't leverage that 70% to get what they want from Universal, not with Universal is looking long term. I'm sure they've noticed digital sales are increasing at the expense of retail sales. So they are doing what they can to reduce the share of iTunes digital music marketshare so that they aren't in bad negotiating positions with iTunes in the future. They are using what leverage they have now.

Universal loses nothing, nor does iTunes (Apple) at this moment with this new contract it seems. For if Universal wants an album to sell then they will distribute it as widely as possible but if they have a popular artist with a new album, then they can use the artist to make money by promoting a rival download site (or iTunes) for exclusive downloads.

Some one mentioned the word manipulative monopoly which is redundant. Monopolies are never good for the market place because they control the market.

Originally Posted by zgh1999

It is very laughable that Universal would pull a stunt like this on Apple.

iTunes is about the thing right now working in the music industry's favor. It generates income for them. Apple is not earning much from iTunes. Essentially, iTunes is a low-margin service that Apple sets up as a favor to the music industry and consumers of iPod, to complement its iPod products.

It is laughable that you think that a multi-billion dollar company does a "favor" for another multi-billion dollar company. And as far as I know the iTunes store is no "favor" for me. I still pay to get songs. Cheaply and quickly sure but Apple isn't going out of its way and losing money so I can use iTunes. If iTunes turned no profit or worse hurt the bottomline, I'm sure it would get the axe.

[Goldenbear]

Originally Posted by rockosmodurnlif

...If iTunes turned no profit or worse hurt the bottomline, I'm sure it would get the axe.

When iTunes first launched, Apple publicly stated that it was simply hoping to break even (or something to that effect). The point of the iTunes Store was to sell ipods. It wasn't until much later that it started to make a (small) profit. These days, it's probably making a decent (but not large) profit, since the vast majority of the $.99 you pay goes to the music labels.

So no, I don't think Apple will be axing iTunes if it fails to make a profit. Not unless there's a drastic change in their business model.

[200paul]

Originally Posted by Phobophobia

These are the same guys who get paid for each Zune sold...

Yeah - I don't get that at all. Why do they get a dime? How arrogant can they be? They should concentrate on finding and nurturing good artists with longevity in their careers instead of these short lived rappers and bubblegum pop stars. Basic business practice - good product at a fair price = sales and profit.

[Abstract]

Originally Posted by Phobophobia

These are the same guys who get paid for each Zune sold...

So they made....what......$17.32 off the deal?

[sblasl]

Becareful here, It is alleged that Apple is getting a piece of the action from AT&T for every iPhone activation.

Originally Posted by Phobophobia

These are the same guys who get paid for each Zune sold...

[gkarris]

Originally Posted by sblasl

Becareful here, It is alleged that Apple is getting a piece of the action from AT&T for every iPhone activation.

"Welcome to iTunes 7.4, you will need to activate your iPod - the
$3/month charge goes to Universal Music, please input your credit card number..."

[thirdwaver]

Each time the record companies get into the news, I'm astonished by their stupidity and general "not getting it" attitude. It's actually getting funny now.

Sean

[Maclicious]

For a regular iTunes/iPod user, it's like universal saying, "Ok, pirate our music because we're not going to make it available to you legally any longer in your preferred/known venue."

Wow, stupid.

[Rojo]

Originally Posted by Macrumors

Macworld.co.uk suggests that this Universal may be interested in offering exclusive music to other online services besides iTunes, in an attempt to reduce Apple's control of online music distribution.

So wait -- Universal's only goal in doing this is to reduce Apple's control of online music distribution? I don't understand -- they don't like the fact that Apple does it so well? That Apple's so successful? That Apple probably brings Universal a lot of money? Something doesn't make sense here...

Oh I see -- I just read the article. They're not happy with Apple's fixed pricing. They're greedy and want flexible pricing. I get it now. Greed makes more sense, I guess.

Well if they really want to go that route, that's their business. Something tells me they'll be shooting themselves in the foot, though. I'd hate to be the poor bands who end up getting exclusives on some other online music service, and then not doing as well because no one wants to bother using that service...

[The General]

I think you guys are all confused ...

Correct me if I'm wrong, but the way I understand it - Universal is changing the contract so that they are no longer exclusive with iTunes. iTunes will still be selling Universal's music ...