‘BusinessWeek’: Universal intends to take on iTunes
Posted by Dennis Sellers 
Oct 12, 2007 at 11:08am
Universal chief Doug Morris is enlisting other big music players for a service to challenge Apple’s iTunes Music Store, reports BusinessWeek. Universal apparently wants to be able to offer some music by some bands exclusively through other online music services in its attempt to reduce Apple’s control of the online business.
In July Universal issued this statement: ”“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.”
Apparently, the company plans to join forces with other record companies to launch an industry-owned subscription service. BusinessWeek says Morris has already enlisted Sony BMG Music Entertainment as a potential partner and is talking to Warner Music Group. Together the three would control about 75 percent of the music sold in the U.S.
“Besides competing head-on with Apple Inc.’s music store, Morris and his allies hope to move digital music beyond the iPod-iTunes universe by nurturing the likes of Microsoft’s Zune media player and Sony’s PlayStation and by working with the wireless carriers,” says BusinessWeek. “The service, which is one of several initiatives the music majors are considering to help reverse sliding sales, will be called Total Music.”
The article adds that the business model seems to shape up like this: get hardware makers or cell carriers to absorb the cost of a roughly US$5-per-month subscription fee so consumers get a device with all-you-can-eat music that’s essentially free. Music companies would collect the subscription fee, while hardware makers theoretically would sell more players.
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Neal Eaton Says:
I would like to guess that the ‘partner’ who is willing to pay $5 per player sold is Microsoft...no other compnay in their right mind would agree to thiese kind of terms.
I also have no doubt that this service will not work with iPods OR with the Mac OS. Too bad Universal and BMG want to limit themselves and the audience that they can reach.
I also don’t get the subscription thing. Why would anyone WANT to RENT music?
Posted on October 12, 2007
dave Says:
Except NO manufacturer can afford to sell a device for a fixed amount, yet pay someone else a monthly fee to enable use of the device. And of course, mass music rentals [and rentals on a per-device basis] is the current wet-dream of music execs, because it means:
a) monthly fees for a device [I guess, even after the device is broken or thrown away]
b) makes royalty payments to artists more vague [which equals smaller/no payments to artists]
c) reduces costs for labels. No need to advertise/push an artist, because they get the money no matter what. If anything, they promote themselves [EMI has the best music], as the monthly rental will probably be split between the labels based on overall marketshare.
Posted on October 12, 2007
DAG Says:
Sounds like collusion to me.
From Wikipedia:
“In the study of economics and market competition, “collusion” takes place within an industry when rival companies cooperate for their mutual benefit. Collusion most often takes place within the market form of oligopoly, where the decision of a few firms to collude can significantly impact the market as a whole. Cartels are a special case of explicit collusion. Collusion which is not overt, on the other hand, is known as tacit collusion.”
Of course with our current Department of Justice I doubt anything would be done.
Posted on October 12, 2007
Rick Auricchio Says:
Wow, it sounds like deja vu all over again.
The record companies did this in the past, but the morons forget. All record companies were formed in order to sell the hardware their parent companies manufactured.
Thomas Edison began making films in order to sell his movie projectors to theatres. RCA Victor made records to sell phonographs (actually, so did Edison).
So today’s morons are trying to do the same thing, except this time they think there are even dumber companies who will foot the bill.
Posted on October 13, 2007
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Dennis Sellers
Dennis has been a newspaper editor/reporter (seven years) and teacher (seven years). He has over 4,000 magazine, newspaper and online articles to his credit. He has also covered the Mac and tech industries for over a decade for such online publications as MacCentral, MacMinute and now MacsimumNews.
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Jarod Says:
I guess the stupidity is really universal ;-)
NOONE want subscription. Get it through your think heads!
Posted on October 12, 2007