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Zune Profits Go To Record Label

kdawson posted more than 7 years ago | from the how-to-bleed-the-iPod dept.

155

genegeek writes, "The New York Times reports that Microsoft has a new deal with Universal to share profits from Zune player sales. David Geffen, the media omniboss, is quoted: 'Each of these devices is used to store unpaid-for material...' The new business rationale is that stolen music should be paid for by profit sharing of newly sold Zune music players. Does that mean if you are not stealing music, you should get a discount on the players? Universal expects a similar deal from Apple when their current contract expires." Reader Gallenod adds, "Microsoft appears willing to spend millions and defer any potential profitability of the Zune simply to weaken Apple's bargaining power with recording companies and set a precedent for hardware manufacturers paying music companies."

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155 comments

Great (5, Insightful)

AoT (107216) | more than 7 years ago | (#16786085)

"set a precedent for hardware manufacturers paying music companies."

Yeah, remind me to thank Microsoft for all this 'innovation' they've done for the customer the next time I'm up in Redmond.

Figures (1, Informative)

kmx69 (935085) | more than 7 years ago | (#16786113)

This is a step in realizing they will never be able to stop piracy. It won't be long until Apple is forced into this as well. Who after that, PC manufacturers/distribuitors? When there's a will there's a way, they say. In this case, when there's power, there's gonna be a way.

'Each of these devices is used... (4, Insightful)

jimstapleton (999106) | more than 7 years ago | (#16786139)

'Each of these devices is used to store unpaid-for material...'
Really? That guy is a dipshit (pardon my language, but nothing "softer" is better at describing this)

WTF. /NONE/ of the music on my portable mustic player is or has ever been stolen. I know plenty of people in the same boat. Admittedly none of them are Zune, but that that doesn't make the asshat's claim any less false.

Expects to cut the same deal with Apple? (5, Informative)

R2.0 (532027) | more than 7 years ago | (#16786151)

Didn't the record labels try to "alter the deal" the last time their contracts were up?

Didn't Jobs spank them back into submission?

Can't see it any different this time.

What do customers get from this? (4, Interesting)

ronanbear (924575) | more than 7 years ago | (#16786157)

Microsoft pay Universal money for each Zune sold. Maybe that helps them get a better deal with Universal songs on the Zune Marketplace. The songs will still be $0.99 though.

The other record labels don't get any money so they seem to be losing out.

What about European/rest of world customers? Does this mean that the Zune will be a different price in each country due to licensing requirements? What about not available?

To me this looks like honest customers being charged for music twice. The RIAA has been quite vocal about p2p piracy. Does this mean they won't go after Zune owners? I don't think so.

I'd want money from Universal then... (4, Insightful)

Incongruity (70416) | more than 7 years ago | (#16786177)

They're trying to charge me (indirectly) for stealing their music (which I don't, never have, and never will) -- so I'd want my money back. Greedy bastards. How dare you treat customers like presumed crooks?

and the artists? (0)

Anonymous Coward | more than 7 years ago | (#16786187)

"Each of these devices is used to store unpaid-for material..."
should read
"Each of these record companies promotes unpaid-for material..."

so, lower your profit margins and start paying the bloody artists and we as consumers will start buying CDs and music again...

Here's hoping Apple will hold strong (4, Funny)

IAmTheDave (746256) | more than 7 years ago | (#16786197)

I can't wait for Apple's contract to come up, and for Steve Jobs, still owning a good 85-90% market share, to bitch-slap these new Zune-happy CEO's to the ground like the little greedy trolls they are.

What a pantload. (3, Insightful)

Rob T Firefly (844560) | more than 7 years ago | (#16786205)

So how much will MS be paying all the unsigned bands who are duping their own discs without the "benefit" of a label?

Yeah right... (4, Insightful)

twofidyKidd (615722) | more than 7 years ago | (#16786215)

"Microsoft appears willing to spend millions and defer any potential profitability of the Zune simply to weaken Apple's bargaining power with recording companies and set a precedent for hardware manufacturers paying music companies."

This will go over like gangbusters with Apple and consumers alike. To think that the record industry will try to leverage a deal with another business with regards to consumer goods (music) is ridiculous. Nevermind the fact that Apple will simply leverage their massive iPod fan base against the labels, customers just won't stand for it. Especially when the market for digital media players is already supported by people who have proven they are willing to pay for music, a label-imposed "tax" on those players to cover "stolen content" won't fly.

Both Ways? (5, Interesting)

longbot (789962) | more than 7 years ago | (#16786217)

So, does this mean that if I own a Zune, that I'm then entitled to pirate enough music to fill it? And if not that much, then where do they intend to draw the line? After all, if I've already effectively paid for the lost profits from pirated material, why would I want to pay twice?

What they expect and what they get are different. (4, Insightful)

Viewsonic (584922) | more than 7 years ago | (#16786223)

This is kind of amusing. So does this mean if we pay a "piracy tax" up front, that we can then pirate music? And how can a music company possibly expect Apple to make some sort of deal like this. Are they going to boycott Apple if they don't? Haha.

Not Good. (2, Insightful)

Thansal (999464) | more than 7 years ago | (#16786225)

This is not a good precident. I know other countries already have a blank media tax, and I always thought this was ONE way the USA was better off then said countries.

The concept of paying RIAA companies because they are selling something that COULD be ussed to infringe on their copywrites is just a horrible idea.

Even assuming that this is a good idea, the problems are still obvious:
Do unsigned bands get a share? what about companies not part of the RIAA?
Do gun manufacturers have to proffit share with police (after all, guns could be used to commit crimes), what about with regular citizens, quikymart owners (after all, they are at a higher risk)?

Just because somethign CAN be ussed to to commit an offence does not say that it WILL be.

and as TFS says, if I only use my MP3 player for legitamite purposes, can I seek a refund? (as I am sure that MS is not going to just hand over part of their proffits, they will just include the price in the player).

pissing in the pool (4, Funny)

mgblst (80109) | more than 7 years ago | (#16786239)

Ok, who invited Micrsoft, their pissing in the pool again.

Great strategy, if you lose, then wreck it for everyone.

David Geffen of all people... (1)

jpellino (202698) | more than 7 years ago | (#16786259)

Should realize the value of "innnocent til proven guilty".
Or did he forget all that blanket isolation and persecution of gay men as little more than disease vectors.

On the flipside... (5, Insightful)

MrAnnoyanceToYou (654053) | more than 7 years ago | (#16786277)

If I'm paying for pirating music before I do so, it's now ethical for me to pirate however much music I want.

The amusing thing here is that the 'prepaid pirating fee' doesn't go anywhere near the artists. Ever. It's just an inter-company corporate bribe. Between monopolistic organisations. Man, can't you feel that capitalistic efficiency?

All you can eat (2, Insightful)

ericlondaits (32714) | more than 7 years ago | (#16786323)

If it means I no longer have to pay for any Universal CDs because Microsoft is doing it for me then I'm getting a Zune right now! Woo hoo!

But I suspect that just like with the "blank cds tax" it means you are paying for being suspect of doing something that's still illegal and which you might get sued for. Brilliant... a tax that you shouldn't be paying, either because you don't download illegal MP3s or because accepting the tax as rightful means admitting to doing "copyright violations".

What about no theft? What about no Universal? (1)

scottsk (781208) | more than 7 years ago | (#16786327)

Not only what about no theft... I don't listen to music on my portable player!!! Why should I pay a premium?

I do have a few MP3s on my portable player, even though I rarely listen to them. So the real question is:

But what if the music you listen to isn't on Universal? Why should they get money? I can't think of anything I own that's on Universal, although with the constant buy-outs and catalogs moving, something I bought in the mid 90s. I would never knowingly buy something from them. (If I did steal music, I would not steal music from them!) Why do they get a cut from the purchase of these portable players unless someone is actually going to play Universal music on them? Even if I did buy something on Atlantic, A-and-M, or one of the other labels that have been swallowed up in the 90s or 2000s, why should anyone have to pay a premium to use a device?

Either third-party MP3 players like the Muvo (yes!) or SanDisk will be doing brisk sales, or D.I.Y. music player kits will become common at newegg.com (how hard could it be to solder an earphone jack to a USB keychain?)

Consumers are Idiots (1, Insightful)

0racle (667029) | more than 7 years ago | (#16786347)

This will go over like gangbusters with ... consumers alike. To think that the record industry will try to leverage a deal with another business with regards to consumer goods (music) is ridiculous. ... customers just won't stand for it.
You mean how consumers won't put up with everything that they put up with? Consumers in general will never care because for the most part they will never know.

Have you ever watched people shop? They buy what appears to be a good deal they don't look into whether it is or not. Consumers in general are idiots, and I don't know where the idea that they aren't came from.

Selling at cost or loss is hardly new ... (2, Insightful)

AHumbleOpinion (546848) | more than 7 years ago | (#16786361)

"Microsoft appears willing to spend millions and defer any potential profitability of the Zune simply to weaken Apple's bargaining power with recording companies and set a precedent for hardware manufacturers paying music companies."

Selling at cost or a loss to gain marketshare is hardly anything new, we're talking Econ 101. Apple basically did so with their on-line store, they wanted to spur use of the iPod. Microsoft is doing pretty much the same thing except they are discounting the hardware to spur use of their on-line store. On-line sales is where Microsoft sees the future, take a look at XBox Live, micropayments of add-ons, etc.

With regard to "setting a precedent", more Econ 101. Using a low price point to establish a barrier to entry. Another predictable move as digital music players become mass market commodity items. iPod dominates the current market, but the current market is a small fraction of the potential market. We are only now leaving the early adopter phase. iPod's current success is not unlike Apple's success with the Apple II when the personal computer market was in it's infancy. Apple pioneered the way then and now, but back then failed to capitalize on that early success to dominate the emerging market. Has Apple learned, or will history repeat itself? I don't know. I tend to think Apple has learned, however I think that this will translate into Apple being one of several major players in the future mature digital music player market. I don't think anyone will be able to dominate as IBM did with PC hardware and Microsoft did with PC software.

I've got a deal for you Apple... (3, Interesting)

NtroP (649992) | more than 7 years ago | (#16786417)

I'll tell you what, Apple. You don't renew your contract with Universal. I'll buy an iPod. I'll buy any conent I like from iTunes (i.e. the content from studios that AREN'T asshats) and I'll pirate Universal content. Zune sales (all three of them) can salve Universal's wounds. So basically, everything is square. I purchase content I can get legally, but pirate content that I can't or has DRM that is too restrictive for me. Everyone (except Universal) will be happy.

2 thoughts on the topic (1)

plopez (54068) | more than 7 years ago | (#16786471)

1) Could this be construed as predatory practices? Not that it matters with Bush in the Whitehouse

2) OK, so a hardware sale is a one time event compared to actual music sales. It occurs to me the better revenue stream may be in the music. And who decides what the profits are? Microsoft? I think the phrase 'It's a trap' may be appropriate here. Once Apple is crippled watch for the profits to disappear, MS making money on side products and Universal getting screwed.

Not Quite (1)

WeekendKruzr (562383) | more than 7 years ago | (#16786477)

I'm not so sure if it's "set a precedent for hardware manufacturers paying music companies," so much as it is set a precedent for hardware manufacturers paying content providers. Let's not forget what it is that Microsoft does for a living. This could be useful precedent for them in the future.

Hands up! (1)

radarsat1 (786772) | more than 7 years ago | (#16786485)

Hands up those who think that Microsoft created the Zune specifically for this purpose...
What a jerk move, setting the bar lower so Apple will have to stoop.
Way to be a team player.
I hate to repeat this annoying phrase, but: "And this benefits the consumer, how?"

In other news... (3, Funny)

Doctor Memory (6336) | more than 7 years ago | (#16786491)

Porsche AG announced it will be sharing part of the profits of its sports-car sales with local police forces everywhere. "It's well-known them por-shees is just too damn fast for us to ketch 'em, so anybody drivin' one is a CRIMINAL!", Sherrif Roscoe P. Coltrane explained.

what does geffen know that we don't? (2, Interesting)

Gospodin (547743) | more than 7 years ago | (#16786497)

"Each of these devices is used to store unpaid-for material."

The only way he could be sure of this is if Microsoft is delivering Zunes with something pirated... Hmmmm.

They are going to have to... (2, Insightful)

bealzabobs_youruncle (971430) | more than 7 years ago | (#16786513)

sell a whole lot of Zunes for this to be relevant when Apple's contract comes back up. MS is a joke when it comes to consumer issues, showing once again all of their media products are about protecting greedy publishers first and user convenience somewhere much further down the list.

Re:Not Good. (1)

fangorious (1024903) | more than 7 years ago | (#16786521)

I know other countries already have a blank media tax, and I always thought this was ONE way the USA was better off then said countries.

We've had a tax on blank media in the US since at least magnetic audio cassettes, if not VHS tapes. The price difference between a blank Music CD and a blank Data CD is a blank media tax.

Bill slurped his soup today (-1, Offtopic)

skaimauve (1004305) | more than 7 years ago | (#16786553)

What if... ...there was one day on Slashdot without any news regarding MS? "Oh, Bill slurped his soup today, let's put it on Slasdot" Surely looks like there is a Slashdot team in Redmond that keeps MS in the talks. Let's have a MS-free day...

Apple's current marketshare won't last ... (0, Troll)

AHumbleOpinion (546848) | more than 7 years ago | (#16786569)

I can't wait for Apple's contract to come up, and for Steve Jobs, still owning a good 85-90% market share, to bitch-slap these new Zune-happy CEO's to the ground like the little greedy trolls they are.

Apple's current marketshare won't last, we are at a very early stage in the development of the digital music player market. I'd say we have barely progressed beyond the early adopter stage, the bulk of the potential market has not committed. I'd say Apple's current iPod position is not unlike their Apple II computer position when the personal computer market was at a very early stage before the bulk of the population entered the market. Personally I think Apple has learned from past mistakes and won't become a niche player again, but I do expect them to be one of several major players. Microsoft's positioning also fits in pretty well with basic theory of how a market evolves, I would say they are positioning themselves for digital music players becoming commodity items.

Since I expect responses regarding the lock-in myth I'll address that now. iPods are predominantly used to play music that is completely portable, MP3s and non-DRM'd AACs. iTunes rips to non-DRM'd AACs or MP3s. The only non-portable music files are the purchases from Apple's iTune Music Store (iTMS). iTMS purchases are easily replaced given file sharing, add to this the fact that the psychological barrier to downloading is far lower given that a person "paid for that song" in their mind. Even if that were not the case the music market has a history of abandoning their current investments when moving from one format to another. However this format transition is even easier to make, iTunes and whatever comes next can happily coexist on your computer.

Therefore ... (2, Funny)

rlp (11898) | more than 7 years ago | (#16786581)

Setting: a courtroom somewhere in the US

RIAA Attorney: Your honor, the defendant admits pirating music ...
Defending attorney: Excuse me your honor, but the defendant owns a Zune.
Judge: Case dismissed.

Apple has no incentive to do this (3, Insightful)

sockonafish (228678) | more than 7 years ago | (#16786585)

Apple already operates the iTunes Music Store at close to zero profits. It only exists to spur sales of iPods. They're not going to forgo iPod profits to please overly greedy record companies.

Apple has stood up to far less ridiculous demands before, like price increases. They're not going to cave on this one.

Hrmmm.. (1, Troll)

m15cr3ant (915414) | more than 7 years ago | (#16786591)

Does this mean that if I buy a Zune player, I can no longer be held accountable for any music on said player even though it might be illegal, because the music industry got their cut?

Dumbest possible move (3, Insightful)

MikeRT (947531) | more than 7 years ago | (#16786603)

Microsoft has just done the unthinkable: they have acknowledged some "social responsibility" to police themselves, genuflect before the Altar of Starving Musicians and Aggrieved Businessmen and generally do the bidding of another industry. It's as f$%^ing stupid as a gun manufacturer agreeing to whatever Handgun Control Inc wants in the name of "keeping guns out of criminals' hands."

Policing bad behavior is for the courts. People who make perfectly valid tools don't owe jack to those who are hurt by their misuse. Get a damn grip, Microsoft. You aren't hurting Apple's marketshare, you're hurting your lobbying efforts and things like that.

I am SO F*CKING SICK OF (2)

TheDarkener (198348) | more than 7 years ago | (#16786615)

the whining record/movie execs. "Oh, people are steeeaaaling! Pirates! Go to jail!" GET WITH THE FREAKING PROGRAM, PEOPLE!!! Technology has found a way around your business model, and IT WOULD BE BENEFICIAL FOR YOU TO ADAPT TO IT.
 
The more you resist, the more 'old-school' you'll become.

Nothing like paying twice... (4, Insightful)

gillbates (106458) | more than 7 years ago | (#16786633)

Under the deal, Universal, the world's largest music corporation, will receive a percentage of both download revenue and digital player sales when the Zune and its related service are introduced next week.

So let me get this straight: you pay Universal when you buy the device, and then you pay them again for the music you load on to it?

What if I never listen to any of Universal's music?

What really strikes me as ridiculous is that Universal's terms seem to imply that even a legitimate music purchase is still piracy .

At this point, the only moral thing to do is to stop buying music. You aren't going to appease the record companies - they'll call you a pirate no matter what. If we all stopping funding the RIAA lawsuits, maybe they would go away.

Wi-Fi 3 day song sharing? Harder to sue customers? (3, Interesting)

dlim (928138) | more than 7 years ago | (#16786651)

Actually, the Zune is designed to store "unpaid-for material..."

We haven't already forgot about the "feature" that allows you to send your songs to your friend's Zune, which stores them for 3 days (even if it's stored in a DRM lockbox), have we? I think that case may be harder to make with an iPod.

Also, the author's logic is a bit flawed. To say that because Apple did not sell me every song on my iPod means that the rest were either stolen or ripped from CDs is not a valid argument. For example, much of the music on my iPod was purchased through other services, such as eMusic.

I'm also wondering if taxing devices will help to invalidate the consumer lawsuits that labels such as Geffen, through the RIAA, have been launching for the last few years. Or maybe the labels / RIAA have figured out that they can't get away with extorting their customers too much longer.

It doesn't matter... (2, Insightful)

The Faywood Assassin (542375) | more than 7 years ago | (#16786663)

The Zune is so DRM laden and an example of "This is what we tell you that you want" that sales will only be great for a month before people regret their purchase and return them.

Case in point, their Wi-Fi "borrowing" crap. Instead of using Wi-Fi to do something useful, they simply use it as a reminder that they control what you do with the device.

Universal, the profit on no sales is $0.

Beny

Profit, what profit? (2, Interesting)

Anonymous Coward | more than 7 years ago | (#16786665)

This is brilliant. Kudos for MS!
Get the labels to bid on fool's gold.
MS just had to drop 50 bucks on Zune price to be competitive with iPod.
What is the profit? -$50? or maybe -$100.
So, maybe Universal will be giving 25 usd to MS for every Zune sold.

Article headline is wrong (as usual) (1)

Rocketship Underpant (804162) | more than 7 years ago | (#16786677)

That should read "sales", not "profits", as the Slashdot editors would have realized had they read the first sentence of the article linked to.

Initially, reading the Slashdot headline, I thought "joke's on you Universal -- there won't be any profits for you to get a cut of!". But it turns out it's actually a royalty for every sale that Universal received. I wonder how much it is, and how bad Microsoft's losses on these things will get when all the other labels make the same deal.

Cease and desist! (3, Insightful)

Opportunist (166417) | more than 7 years ago | (#16786685)

So, what this technically tells me is that everyone who buys a Zune already pledges guilty of being a criminal, infringing copyright? Because, well, at least in my country, there should be no punishment without verdict, no (positive) verdict without crime.

So either lift that or I will not even go near a Zune. I am NOT infringing copyright, and anyone who says otherwise should either put proof on the table or face me in court.

Justifies Music Theft (1)

TheNinjaroach (878876) | more than 7 years ago | (#16786697)

..if the cost of my product already goes to pay for the music I steal on it, does that make stealing music on a Zune device legitimate?

Illegal Monopoly money (2, Interesting)

Anonymous Coward | more than 7 years ago | (#16786703)

1. Microsoft are yet again using their "illegal monopoly money" (from Windows, Office) to force their way into other markets and destroy the competition. If the USA legal system was really about justice and not bribes, they should never be allowed to do this.
2. If this passes, expect movie studios to sue Sony, JVC, Toshiba, Hitachi, Panasonic, etc. Also expect publishers to sue Xerox, Brother, HP, etc.

So either Microsoft are willing to lose money AND get thrown in court yet again and/or the RIAA expect to be the only one to be able to extract money from hardware vendors without paving the way for a huge precedent that will make the whole "media" economy go down the drain (or at least throw everyone in court).

Microsoft has too much money from illegal business practices, the RIAA is too greedy and stupid, and the lawyers are about to get a lot richer.

I've been branded a thief! (0)

Anonymous Coward | more than 7 years ago | (#16786711)

I used to have a lot of respect for David Geffen, being the guy who helped support John Lennon's "Double Fantasy" album when no one else would touch it, and supporting quite a few other music artists I enjoy.

Now the guy has branded myself and anyone else with an MP3 player as a thief.

Cheers David.

You know what? I don't pirate music but maybe I should, after all it looks like you believe I do and you're even getting companies to pay for music that may or may not be stolen.

Pussy whipped (0)

Anonymous Coward | more than 7 years ago | (#16786715)

Seems like Microsoft is a pussy whipped bitch if its going to pay money to the record labels because people who buy Zune might unauthorizedly store copyrighted music on your device.

Make them pay royalties...on NOTHING (1, Interesting)

Anonymous Coward | more than 7 years ago | (#16786727)

This is a great opportunity to help send a consumer message to the industry: Stupid anti-consumer deals equate to zero sales.

Microsoft is poisoning the market because they can't compete. Don't support them by buying their products! Make Zune fail and punnish Microsoft!

By all reports they've spent 10's of millions on development and allocated somewhere north of $300m for marketing - on standard consumer electronics margins they'll have to sell 16 million players to approach making back their investment, probably more due to the deal they're cutting. Wouldn't it be nice if they only sold a couple hundered thousand and ate $390m in development costs?

Spread the word: Boycott Zune!

Piracy Tax (-1, Redundant)

Anonymous Coward | more than 7 years ago | (#16786753)

There is no pirated music on my computer, on my iPod, or on any of the blank CDs or DVDs that I burn and I am really sick of record companies thinking they are entitled to a piracy tax.

Getting a discount? (2, Insightful)

tthomas48 (180798) | more than 7 years ago | (#16786757)

Getting a discount shouldn't be joke. I don't pirate music. Period. All of my music currently has a corresponding CD in a cabinet on the wall in my living room. There are over 400 of them. This is a great reason not to buy a Zune. I don't want to be giving more money to the record companies than I need to. And I'm sure the profits this generate will not go to artists in any way.

Re: Here's hoping Apple will hold strong (3, Interesting)

AHumbleOpinion (546848) | more than 7 years ago | (#16786793)

I can't wait for Apple's contract to come up, and for Steve Jobs, still owning a good 85-90% market share, to bitch-slap these new Zune-happy CEO's to the ground like the little greedy trolls they are.

Apple's current market share won't last, we are at a very early stage in the development of the digital music player market. I'd say we have barely progressed beyond the early adopter stage, the bulk of the potential market has not committed. I'd say Apple's current iPod position is not unlike their Apple II computer position when the personal computer market was at a very early stage before the bulk of the population entered the market. Personally I think Apple has learned from past mistakes and won't become a niche player again, but I do expect them to be one of several major players. Microsoft's positioning also fits in pretty well with basic theory of how a market evolves, I would say they are positioning themselves for digital music players becoming commodity items.

Since I expect responses regarding the lock-in myth I'll address that now. iPods are predominantly used to play music that is completely portable, MP3s and non-DRM'd AACs. iTunes rips to non-DRM'd AACs or MP3s. The only non-portable music files are the purchases from Apple's iTune Music Store (iTMS). iTMS purchases are easily replaced given file sharing, add to this the fact that the psychological barrier to downloading is far lower given that a person "paid for that song" in their mind. Even if that were not the case the music market has a history of abandoning their current investments when moving from one format to another. However this format transition is even easier to make, iTunes and whatever comes next can happily coexist on your computer.

Hmm? (1)

Maekrix (1025087) | more than 7 years ago | (#16786799)

Have any of you checked prices? You'll be paying the same amount of money for the Zune as you will the Apple 30gb. The Zune, imho, will already be a better device than the crApple iPod to begin with, and its at a competitive price.

In any case, with or without the tax, you can bet Microsoft would have the same price (BestBuy has CL, iPod and Zune (all 30gb) for the same price: $250). So by including the tax, they're losing profit, not you. You'd still be paying the same amount for a 30gb mp3 player, so it doesn't even affect you. Why are you complaining?

I need a scorecard here... (1)

Churla (936633) | more than 7 years ago | (#16786805)

Which are the evildoers now?

a) Apple - For pioneering the DRM model of "buying something doesn't really mean you OWN it"
b) MS - for partnering up with this music company and cutting them in for considerations.
c) The music industry - for general asshattery and the RIAA
d) All of the above?
e) CmdrTaco

I hope Apple (1)

pkulak (815640) | more than 7 years ago | (#16786815)

tells Universal to fuck themselves if they try to bring this to the bargaining table. Just rip them out of the iTunes store, I don't care. My only interest in that store is the TV shows and movies.

Re:Article headline is wrong (as usual) (0)

Anonymous Coward | more than 7 years ago | (#16786831)

Actually, punctuation always goes inside your quote marks.
Thusly:

"That should read "sales," not "profits," as the Slashdot editors would have realized had they read the first sentence of the article linked to.

Initially, reading the Slashdot headline, I thought "joke's on you Universal -- there won't be any profits for you to get a cut of!" But it turns out it's actually a royalty for every sale that Universal received. I wonder how much it is, and how bad Microsoft's losses on these things will get when all the other labels make the same deal."

But hey, nobody's perfect.

Re:On the flipside... (1)

dyarid (732794) | more than 7 years ago | (#16786835)

It actually looks like the artist will get half of the profit from this. From TFA:

Universal, which releases recordings from acts like U2 and Jay-Z, said it would pay half of what it receives on the device to its artists.

but there is no stealing involved... (1)

krell (896769) | more than 7 years ago | (#16786849)

"The new business rationale is that stolen music should be paid for by profit sharing"

Since nothing can be stolen via file sharing or p2p, why even mention "stolen music"?

pay twice ? (1)

Atreide (16473) | more than 7 years ago | (#16786855)

If i pay RIAA by blank cd or Zune, then it means i can download anything i want, it already paid !
Why should i buy some audio album compact disk then ?

If i am not supposed to download something that i did not pay, then that fee to RIAA is not very legit.

When will police fine you for excessive speed just because you can over speed with your new car ? That is plain stupid and i wonder if that can be defended in court.

Re:Article headline is wrong (as usual) (1)

reptilicus (605251) | more than 7 years ago | (#16786877)

Good point. Given that MS is expected to lose $50 per Zune player sold, there won't be any profits to speak of for a very long time.

Oh WTF? (1)

Cr33pybusguy (1012459) | more than 7 years ago | (#16786883)

"The new business rationale is that STOLEN music should be paid for by profit sharing of newly sold Zune music players"

This pisses me off. They automatically assume that every motherfracking MP3 player is playing full albums ripped from Teh Piratebay. 99% of my 25GB of music is legally obtained. Bought and paid for via HMV and Futureshop i've even got the two massive CD folders to prove it. Just by buying the Zune in their eyes brands you as a criminal. Looks like We have another product to boycott.

(Although I wouldn't have bought it anyways. Microsoft...*shudders*)

Sounds familiar (1)

Orange Crush (934731) | more than 7 years ago | (#16786911)

This reminds me of my old pa. Whenevers we'd get to misbehavin and all that, he'd take us out back and whip us real good for what we'd done wrong and gotten caught fer. Then he'd whip us again for the stuff we'd done wrong he didn't catch us fer. And then he'd whip us again for the stuff we wuz gonna do wrong later.

I'm glad old Billy Gates and Stevie Ballmer lerned themselves sim'lar lessons from their daddys too.

Not my device, jerk (0)

Anonymous Coward | more than 7 years ago | (#16786931)

'Each of these devices is used to store unpaid-for material...'

Yeah, they're called podcasts, pal. That and selections from my legitimately and legally ripped CD collection. Apparently Zune is not for honest people, only for thieves.

Ever notice when a prominent public figure rails on and on about the sins of the people? It's amazing how often they themselves have trouble with that evil. Take a deep breath, music industry, and look in the mirror.

great (1)

Programmer_In_Traini (566499) | more than 7 years ago | (#16786965)

oh great,

first they tell us : don't download illegal songs

then they tell us : do download illegal songs ...we don't care we'll make you pay either way, in fact, we'll make you pay double if you do pay for your songs...

In France, there is a tax for that (1)

Thoran (215178) | more than 7 years ago | (#16786987)

In France, we already have to pay a tax (The Tasca Tax) for each storage medium like CD-Rom, mp3 players. The money collected by that tax is supposed to be given to artists.
You have to pay that tax even if you buy a CD-Rom to archive your personal data. At some point, it was even proposed that that tax should be paid for a hard drive in a PC. IIRC, this is currently not the case.

What will be the practice in France? Shall we pay twice?

Profits ??? (1)

mtjs (918147) | more than 7 years ago | (#16787005)

Zune is sold @ a loss... I've calculated that if you want to get Microsoft out of business you have to buy 1 billion zunes...

Similar to Microsoft's Patent Strategy (1)

LKM (227954) | more than 7 years ago | (#16787017)

I usually try not to hate on Microsoft too much. They're a huge company with both good and bad sides. This, however, is unfortunately typical Microsoft behaviour: Help your smaller enemies so they can go after your larger enemies. It's similar to their patent strategy: Lose a patent dispute so the patent holder can go after other companies who can't just give away money like Microsoft can.

This sets a really bad example. I don't like paying for music I won't listen to. I don't like giving money to the major labels. I won't ever buy a Zune.

Repeat after me... (1)

rfernand79 (643913) | more than 7 years ago | (#16787041)

It will happen. It is Microsoft's strategy to anger Apple.

NOT!

It is lame and stupid, next they'll try to tax CD burners and HDs because they could potentially use them for copying music (they did that in Mexico for one year, believe it or not).
  It won't work, even if they do it. People just won't tolerate it.

Player "tax" (1)

Jabrwock (985861) | more than 7 years ago | (#16787047)

a label-imposed "tax" on those players to cover "stolen content" won't fly.

They're just mad because the Cdn courts ruled that "blank media" taxes to compensate recording companies (which applied to CDs, DVDs, and mp3 players like iPods), wasn't legal, and they had to give the money back. So now they're trying to impose it through browbeating mp3 player manufacturers.

Like The Auto Unions (1)

Nom du Keyboard (633989) | more than 7 years ago | (#16787063)

This is like the auto unions have been. Each time contracts are up for renewal they pick the weakest company, or the one with the hottest car for sale who doesn't want the disruption, and strike them. When the contract terms are favorable enough to agree to, this becomes the model for all the other automakers to have to sign.

In the reach of short-term profits and obvious attempts to damage Apple, Microsoft has done a huge disservice to consumers overall. And they don't even fsking care!

Does This Then Mean? (1)

Nom du Keyboard (633989) | more than 7 years ago | (#16787089)

Does this then mean that the RIAA can't sue you for sharing downloaded music from your Zune to any other Zune, since that music has now been paid for?

In Canada the CD levy was successfully argued in court that downloaders were protected since they'd already paid for the music on their overly taxed CD's.

Oh come on. (1)

Kyokugenryu (817869) | more than 7 years ago | (#16787097)

There could be an article about there being a downloadable update for the Xbox 360 that will cure your cancer, and 90% of Slashdot would be flaming Microsoft for not coming out to your house to install it themselves.

"YOU MEAN I HAVE TO USE THE INTERNET TO DO IT? I KNOW MANY PEOPLE WHO DON'T HAVE THE INTERNET WHO WANT THEIR CANCER CURED, REDMOND IS FULL OF BULLSHIT."

I personally think that this isn't such a bad idea. Personally, I won't even lie and say I don't pirate music, as I do. TFA also states that artists would get half of what the label gets, which is awesome. The players are already cheaper than iPods, so it's not like we're paying a premium for this, it's Microsoft sharing something totally on their end. They're giving $1 for every player sold to Universal folks, they're not charging you $50 extra for some "evil corporation" tax. Artists are getting part of this money too, which is something I'm not at all complaining about.

What about the artist? (1)

haggie (957598) | more than 7 years ago | (#16787099)

How much of the payment to Universal will go to the artists and songwriters? If this and the YouTube deal don't show artists and songwriters what their future looks like, I don't know what more can be done. The labels are making all the deals, taking all the proceeds of those deals, threatening and suing music listeners as artists stand by silently letting all this take place. Artist complacency today will guarantee them a future as wage slaves for the labels.

Apple should BECOME a record label (2, Interesting)

DulcetTone (601692) | more than 7 years ago | (#16787125)

What do the labels actually DO anyhow? Apple should approach artists, offer them double what they last got from an old-school record label, and tell them, "We'll sell your music in the form consumers actually prefer". They don't need shelf space (who sees these alleged "shelves", anyhow?), and offering double the cut to artists will resonate and be cheap to offer, given Apple's ITMS overhead.

What is the actualy canadian rule? (1)

Thansal (999464) | more than 7 years ago | (#16787129)

#16787047 [slashdot.org]
a label-imposed "tax" on those players to cover "stolen content" won't fly.

They're just mad because the Cdn courts ruled that "blank media" taxes to compensate recording companies (which applied to CDs, DVDs, and mp3 players like iPods), wasn't legal, and they had to give the money back. So now they're trying to impose it through browbeating mp3 player manufacturers.


#16787089 [slashdot.org]
Does this then mean that the RIAA can't sue you for sharing downloaded music from your Zune to any other Zune, since that music has now been paid for?

In Canada the CD levy was successfully argued in court that downloaders were protected since they'd already paid for the music on their overly taxed CD's.


These 2 posts state contradictory court decisions about the Canadian blank media tax.

any one have a link to an article?
or can explain it a bit better?

Whole lotta nothin' (1)

macdaddy357 (582412) | more than 7 years ago | (#16787139)

Nobody wants the Zune! If kids get one for Christmas, they will return it and get an iPod. Universal will get a whole lotta nothin'!

Re:Here's hoping Apple will hold strong (1)

steveo777 (183629) | more than 7 years ago | (#16787147)

I'm hoping that's the case. This sounds a lot like a MS tatic to try to bury Apple. (make a new industry standard that the other guys can't afford). Seeing as I don't have any stolen music on my iPod, I flat out refuse to buy a Zune. I was open to switching over if it was worth it, but now I'm not even going to look into it.

I certainly hope this announcement makes it to the mainstream. I also hope the media puts the 'correct' spin on the story. Microsoft agrees that we are thieves, all of us. And is forcing EVERYONE to make up for it. Bullshit.

"It's a higher-level business relationship" -Chris Stephenson, general manager for global marketing in Microsoft's entertainment unit

Does that mean they out-and-out just call their cunsumers liars and thieves to thier faces?!

Sounds like a voluntary media tax (1)

msobkow (48369) | more than 7 years ago | (#16787223)

The *AA tried to force Canadians to pay a "royalty" for pirated music when buying any media player, on the theory that their primary use is to play pirated media.

It was knocked out as unconstitutional, and justly so. How insane is it to charge the general public with fines and penalties for crimes they haven't even been accused of, much less convicted?

Microsoft is setting a horrible precedence here for the sake of short-term market gain. Typical insane American greed -- to hell with long term stability, as long as I can get my undeserved cut now. :(

Music is then NOT pirated since MS paid for me. (1)

AgNO3 (878843) | more than 7 years ago | (#16787301)

awesome. You know what this means?
This means that you can buy a Zune and Pirate all damn day long because when they come to nail you you have proof that a fee has already been paid for this music and as such is not pirated music. NICE.

So to sum up : (1)

DrYak (748999) | more than 7 years ago | (#16787311)

/NONE/ of the music on my portable mustic player is or has ever been stolen. I know plenty of people in the same boat


Now music majors are going to be compensated for illegaly unpaid for music by :

1. A tax that a lot of country (like France) already have on blank medias (CD-R, DVD+-R, Flash memory, players)
2. A tax on internet connextions that some countries (like Germany) have introduced to account of P2P networks
3. An arangement with device manufacturer (Like the Microsoft / Universal deal)
4. The price for the song from the online store
5. The price for the song from the *other* online store on which user was but couldn't transfer he's music due to DRM incompatibility between proprietary formats (Apple AAC, Sony ATRC, Microsoft Play-for-Sure WMA, Microsoft Zune WMA)
6. The price of the original media (CD, Tape, LP) that the user paid some time ago but couldn't import into his digital library because it isn't DRM-blessed.

And with all this money, majors will continue to whine, to prove they're victim of piracy by comparing their actual ernings with expected projection they pulled from their arses (as mentionned in several article featured on slashdot), and continue to crack down on *evil* eitgh years old ?

And I'll be taxed to the bone because I want to burn on CD, OS install image I pull from bittorrent (2 tax targets) just because I use some open-source OS which is likely : 1. Not to be available in boxed edition 2. Change each 6 months awnd must be therefor burned more often (not like some closed source project that took over 5 years to develop a result that delivers the exact same expirience as before, only with couple of additionnl DRM locks).

It already happened with the "Tape tax" (3, Informative)

antispam_ben (591349) | more than 7 years ago | (#16787315)

Yes, the "tape tax" bill/law from the early 1990's is a tax on blank cassettes sold commercially, and (some of) this money goes to commercially recorded music artists (through their recording labels). This same tax applies to "Music CD-R's" which have the bit set needed for stand-along CD-R recorders to record on them. Of course, "data CD-R's" used on computers were mainly used for backup and legitimate data transfer way back when, and so are exempt from the tax, but now these are surely used mostly for making unlicensed copies of commercial music.

Hardware and media taxes are luducrous, and are unfair to those who use such items legally (podcasts, paid-for downloads from Itunes and similar sites, and musicians recording their own songs). The bad news is such taxes are here to stay. This story of a hardware manufacturer paying a "license fee" to a recording label isn't technically a tax, but with the other already existing taxes, this sets an informal precedent and paves the way for REAL taxes on such devices and blank media.

Canadian blank media levy (1)

Jabrwock (985861) | more than 7 years ago | (#16787321)

Sorry, my earlier post was slightly incorrect. A judge ruled late 2004 that applying the levy to mp3 players wasn't legal. Only blank recordable media could be taxed (although some stores still consider it "unjust" and refuse to collect it from the consumer).

mo3 uP (-1, Flamebait)

Anonymous Coward | more than 7 years ago | (#16787395)

websi73. Mr. de

Display of greed.. (1)

david.emery (127135) | more than 7 years ago | (#16787487)

Well, no matter how bad Microsoft looks, it has -nothing- on the big record companies for bare naked greed.

At least there are people at Microsoft who actually labor to produce the product, and who profit from the results (but how many, and the relationship between contractor contributions and MS employees has been a topic of much discussion...) The big record labels serve only to market the products of others on a contract basis.

        dave

Blank Tape Tax updated for 2006 (1)

klausboop (322537) | more than 7 years ago | (#16787511)

Paying copyright holders for the sale of something that may or may not be used to copy their music has precedent: the blank media tax [wikipedia.org] ? However, thus far it has been determined that MP3 players are excluded from that "tax". From the entry:

17 USC 1008 bars copyright infringement action and 17 USC 1003 provides for a royalty of 3% of the initial transfer price. The royalty rate in Section 1004 was established by the Fairness in Music Licensing Act of 1998. This only applies to CDs which are labeled and sold for music use; they do not apply to blank computer CDs, even though they can be (and often are) used to record or "burn" music from the computer to CD. A similar royalty applies to stand-alone CD recorders, but not to CD burners used with computers.

Thanks to a precedent established in a 1998 lawsuit involving the Rio PMP300 player, MP3 players are deemed "computer peripherals" and are not subject to a royalty of this type in the U.S.

Looks like MS is turning that tide.

Where does this leave Riaa (1)

TheQuietDan (674487) | more than 7 years ago | (#16787517)

I am not much of a music person and won't get one of these, but where does this leave RIAA if you are paying for copied music already?

Will the Zune interface phone home? (1)

Megajim (885529) | more than 7 years ago | (#16787527)

As I already believe that MS is uploading information about the contents of my hard drive when Windows phones home (that's a separate debate), it wouldn't surprise me if the Zune/MS music service was set up to do the same thing. That is, MS tracks the amount of tracks stored on each Zune that were not purchased through its store. Then they report this to the RIAA for statistics. Then the RIAA brings "real" numbers to Apple, claiming that 30% of all music on all Zunes is of dubious origin. Not that this would work, but I just don't trust MS with my data.

Where is the MSFT Shareholder Outrage? (1)

Rude Turnip (49495) | more than 7 years ago | (#16787571)

If I owned stock in Microsoft (I don't), I would be very upset right now that they're taking my shareholder value and giving it to a third party for no perceived benefit.

No, the cat does not "got my tongue." (1)

Impy the Impiuos Imp (442658) | more than 7 years ago | (#16787587)

Does that mean if you are not stealing music, you should get a discount on the players?


Sure. As opposed to merely people who say they don't steal it, they just trade around the original CDs with their friends.

Are you "voting" for Microsoft? (0)

Anonymous Coward | more than 7 years ago | (#16787631)

A couple of days ago, a lot of people voted against an "arrogant" majority party. This latest maneuver by Microsoft is another example of how they arrogantly use their majority position to eliminate smaller companies by using big bucks made from their crappy OS to "buy" record labels and kill off smaller DMP companies who can't afford to do this.

I sincerely hope people will "vote" against this arrogance by spending their money with competing companies.

Yeah, ask Spyglass how well that works. (0, Offtopic)

Moofie (22272) | more than 7 years ago | (#16787693)

They were going to get a cut of the profits on Internet Explorer. Sucks to be them!

It's pretty obvious what he's talking about . . . (1)

indytx (825419) | more than 7 years ago | (#16787719)

By unpaid-for material, he probably means music you've ripped off of your own CDs.

MS has no leverage. (1)

skia (100784) | more than 7 years ago | (#16787747)

Walt Mossberg writes [wsj.com] :

Zune's online store offers far fewer songs, just over two million, compared with 3.5 million for the iTunes store. In fact, as of this writing, songs from one of the big labels, Universal, were missing from Zune Marketplace, though Microsoft says it is confident it will have all the major labels when it launches Zune on Tuesday.


Clearly, Universal stood up to MS, saying "Who do you think you are, Apple? Unless you want your music store to suck and for Zune to be DOA, make with the moolah!"

Express yourself directly to Universal (1)

Toe, The (545098) | more than 7 years ago | (#16787765)

As was pointed out on the macrumors.com discussion, one can e-mail Universal directly at:
communications@umusic.com

If you'd like them to know the intensity of negative feelings they are generating, this would probably be the most direct approach.

Re:Express yourself directly to Universal (0)

Anonymous Coward | more than 7 years ago | (#16787827)

Be sure to tell them that this is the straw that made the camel go back to stealing music.

Re:Where does this leave Riaa (1)

Toe, The (545098) | more than 7 years ago | (#16787863)

I am sure they will give you a refund for every legal song you buy... right?

After all, all they care about is you and your enjoyment of music. Making hordes of money they never earned is somewhere near the bottom of their priority list, I am sure.

Libel? (1)

Scarletdown (886459) | more than 7 years ago | (#16787891)

'Each of these devices is used to store unpaid-for material...'


Sounds like a nice setup for a class action libel lawsuit. :D

Looking at my own collection of CDs, LPs, and tapes that I either purchased (new or used) or received as gifts over the years, a collection that I later ripped and / or digitally recorded to load onto my iRiver, I take some amount of offense in this asshat accusing me of stealing what I had already legally acquired. This is assuming that the phrase "each of these devices" is referring to all portable media players, and not just the Zune.

I hate to repeat this annoying phrase, but: "And this benefits the consumer, how?"


Not quite as annoying if you change it to something that shows a bit more respect for the buyers. How about: "And this benefits the customer, how?"

I guess... (0)

Anonymous Coward | more than 7 years ago | (#16787911)

I guess that means I'll just have to steal a Zune.
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