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).