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Universal Confirms iTunes Contract Change

Ugh, I still can't believe we haven't eliminated the need for these labels yet. It will happen eventually, where they will just squat on their old catalogs for royalties and re-releases in different formats.

The world we live in no longer needs these companies, or at least only four major ones. The smell of death is all over them and they know it. However, what baffles me is that as their business model becomes more painfully obvious to be obsolete, they still claw their nails to hang onto control, instead of at least attempting to adapt to survive in the era of digital distribution.
 
Well unless Universal was very smart, Apple may not be under obligation to promote the Universal Artists. They may only have to promote the ones they have a contract with. Universal looses in that case.

This IMHO is a stupid move, with CD sales declining heavily, Universal should be trying to get as much of their music forward and in front of iTune customers as possible, not playing all those games.
 
This is really funny.

The music industry is dying before our eyes.

Both Walmart and Best Buy (the number 1 and 2 music resellers in the country) are both reducing the shelf space giving to music and Apple's iTunes (the third top music reseller) is actually trying to increase their virtual shelf space.

So let me see if I get this. Universal is going to try to play hardball with Apple, when they're the only player in town expanding and growing their music offering. Sounds really smart to me. I wonder if that's why the music industry is dying.
 
gkarris said:
Yes...



It'll probably be the Zune Store. MS wants to take over that business and Universal is getting $1 per Zune sold.

Nice going, all you iPod pirates!!! :p
Click to expand...

Heheh. $1 for each Zune sold = $700k?

Hahaha... That is pocket change. Hell, Apple just sold more than 700K iPhones in a few days.

You are right though -- something is not right about Universal. Although they claim they have merely refused to sign long term exclusive deal with iTunes, I think what this amounts to is that Universal is planning to go exclusively to the dark side, MS.
 
Exactly how does signing an exclusive contract with another download service benefit Universal or any artist? With Apple owning the market with it's store and almost 80% of digital music players (non-compatible because of DRM), Universal would be screwing themselves by limiting a hot artist to some other service and insisting on a DRM. I just don't get that.

So, lets say U2 releases something and Universal is only going to sell it through Microsoft's Urge. No one with an iPod can listen to it. How many users does Microsoft have vrs Apple? So much for that release. Are they that arrogant to think they own some library title that will cause people who own an iPod to buy something else? :confused:
 
allofmp3

Isn't the Universal music still available on allofmp3.com (or one of its occurrences)?
 
whatever said:
This is really funny.

The music industry is dying before our eyes.

Both Walmart and Best Buy (the number 1 and 2 music resellers in the country) are both reducing the shelf space giving to music and Apple's iTunes (the third top music reseller) is actually trying to increase their virtual shelf space.

So let me see if I get this. Universal is going to try to play hardball with Apple, when they're the only player in town expanding and growing their music offering. Sounds really smart to me. I wonder if that's why the music industry is dying.
Click to expand...

Exactly.

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.

Think of all the money that Apple is turning over to the labels.

I am willing to bet that Universal will move to Microsoft/Zune or Nokia, and that will turn sour, and Universal will end up severely screwing itself, and will in the end come running back to Apple/iTunes. I hope Steve Jobs give them the dressing down then.
 
Primary characteristics of a monopoly

* Single Seller: For a pure monopoly to take place, only one company can be selling the good or service. A company can have a monopoly on certain goods and services but not on others.
* Significant Barrier of Entry: If a company has a monopoly on a good or service, it becomes prohibitively difficult for other firms to enter the industry and provide the same good or service.
* No close substitutes: Monopoly is not merely the state of having control over a product; it also means that there are no close substitutes available that fill the same function as the monopolized good.
* Price maker: Because a single firm controls the total supply in a pure monopoly, it is able to exert a significant degree of control over the price by changing the quantity supplied.
:)
 
zgh1999 said:
Heheh. $1 for each Zune sold = $700k?

Hahaha... That is pocket change. Hell, Apple just sold more than 700K iPhones in a few days.
Click to expand...

That's frickin hilarious when you put those two numbers together and think about the time frame for both.

Anybody know how many iPods Apple sold the first week back in the day? This has got to be bigger than ANYTHING before. Also, how long to get to 1 million downloads did it take iTunes? My aging brain can't retain that kitchy info anymore ;o)
 
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.

zgh1999 said:
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.
Click to expand...

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.
 
Well I hope that Apple doesn't give them the same payout % as other Majors that do have a long term agreement... otherwise, why have a long term agreement?
I would think that you should get a better profit for signing an agreement... like cell phones... 2 years and you get a free phone, no contract, you buy the phone and pay more per minute (that was, until the iphone).
 
I think this all stems from Apple telling Universal "No. We won't give you a dollar per iPod" and the embarrassment it cost them for the snub, if you can call it that. I thought it was ridiculous to even ask for it in the first place.

iTunes Music Store helps to sell iPods. Period. The iPod is the big seller here and Apple will never give into this type "business tactic"/extortion.

Bottomline, people like to buy new music. If they're bored and they want to download something new for their iPod for the next day, they're to find something on Apple's store. This actually hurts no one but Universal. It's all good for the other music companies and of course, Apple.

Also, I don't see it hurting the really successful acts. If you really want the new U2 album and it's not on iTunes, you'll just go buy the physical disc and it'll get on your iPod that way.

Of course, this is all a big bluff and Universal is still on iTunes -- and I bet they never go anywhere.
 
Since when has MR become so infested with Apple zealots? The reasonable, not overreacting, actually thinking people are clearly in the minority. Sad.

This is not bad for Universal, they are merely doing what they do with every other retailer out there. Apple lost a little bit of their online music monopoly but that is a good thing.
No need to boycot anyone, all take a deep breath and go back to your lives. Nothing to see here.
 
Just to smack Universal in the face, I hope Apple releases iTMS To Go soon. If you could download music over EDGE and Movies over WIFI it would boost the sales. Think of all those times when you wanted to listen to a song spur of the moment, but forgot all about it by the time you got home and on your computer. Now if millions of people are making these purchases all the time, that could easily almost double the sales. I know it's not a new idea, but Apple should really speed things up and at least make music available for purchase on the iPhone.
 
Rojo said:
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?
Click to expand...

What part of "monopoly" don't you understand?

Anytime that any single company gets 50% or more of the market means that choice/price/freedom are lessened.

Whether it's Apple in music, Microsoft in desktop operating systems, or Google in online search/apps/advertising - it's bad for the end user.

Choice is good for the consumer, an overwhelming presence in any market limits choice.
 
AidenShaw said:
What part of "monopoly" don't you understand?

Anytime that any single company gets 50% or more of the market means that choice/price/freedom are lessened.

Whether it's Apple in music, Microsoft in desktop operating systems, or Google in online search/apps/advertising - it's bad for the end user.

Choice is good for the consumer, an overwhelming presence in any market limits choice.
Click to expand...
What are you talking about? There's been the Sony store, the Wal-Mart store, the Zune store -- on and on... they just don't know how to do it. They can't make it work. We have more choice than ever before. Tunes are still $1 each and videos and movies are now available and at a very good price. Apple actually gives a damn about the consumer and seems to actually want to step up on our behalf and say NO, YOU'RE NOT GOING TO GIVE LESS TO OUR CUSTOMERS. THEY MATTER TOO MUCH TO US. I'm glad there's someone there to take up for the consumer.

I won't talk about M$ or GOOGLE but as far as Apple is concerned, the consumers/end users are definitely the winners in 2007. I seriously don't know what you're talking about.

PLUS -- Unless you're a Windows user, you would know that anytime ANYONE else comes up with a music store, they completely SHUT the MAC USERS OUT! Most, if not all music players are Windows-only. Thank God Apple gives a damn about us. We have only one choise 99.99% of the time and it's the very best, by a mile.
 
rockosmodurnlif said:
...If iTunes turned no profit or worse hurt the bottomline, I'm sure it would get the axe.
Click to expand...

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.
 
universal

I hate universal. I don't think anybody likes them. They are arrogant, old fashioned, and their music always sounds the same.

If they had a choice we'd be using music CDs for ever and only on CD players they licence. They probably think that every citizen should devote them tax money because of our individual potential to hear free music.

I never wish bad to anyone, but if that company were to go I'd go and toast with friends, and I think I'd find a good number of them that would toast with me.
 
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