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Universal Refuses To Renew On iTunes

ScuttleMonkey posted more than 6 years ago | from the don't-be-greedy dept.

Music 287

UnknowingFool writes "It appears for the moment that Universal will not renew its long term contract with Apple for content on the iTunes store. While the details are not known about the exact nature of the dispute, many speculate that it has to do with Apple's stance on fixed pricing and Apple's refusal to license their DRM. The worse case scenario may include Universal pulling its entire catalog from iTunes. Both sides stand to lose out with 1/3 of of new releases coming from Universal and an estimated 15% of Universal's sales coming from digital downloads. Apple's market share is about 75% of digital downloads, and digital downloads are growing while CD sales are shrinking."

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287 comments

Worst case? (2, Interesting)

EveryNickIsTaken (1054794) | more than 6 years ago | (#19720261)

The worse case scenario may include Universal pulling its entire catalog from iTunes.
How exactly is this the "worse case" scenario? I'd like to see Universal sign with someone else (hopefully a non-exclusive, DRM-free deal.) Competition is always a good thing.

Re:Worst case? (5, Insightful)

Doctor_Jest (688315) | more than 6 years ago | (#19720283)

DRM free?

HAH. don't hold your breath... and it _will_ be more expensive than iTunes, and it _will_ be more DRM-crippling than iTunes.

Yeah, competition's great.

Re:Worst case? (1, Insightful)

E IS mC(Square) (721736) | more than 6 years ago | (#19720349)

Yes. If they go and sleep with somebody else, they are going to suck. "It will suck." "It will not work".

I see this as definitely a good thing.

BTW, Magnatune with Amarok is far better deal then iTunes. Just in case somebody is interested.

But do not let me spoil the party - let Apple whoring begin.

Re:Worst case? (1)

Doctor_Jest (688315) | more than 6 years ago | (#19720431)

No doubt. And since I don't buy any Universal artists, I really don't care if they disappear....

I'd also like to add ambient.us too... (with props to eMusic if you are into subscriptions... but they're crippleware-free!)

Re:Worst case? (3, Insightful)

acvh (120205) | more than 6 years ago | (#19720599)

"BTW, Magnatune with Amarok is far better deal then iTunes. Just in case somebody is interested. "

There IS the issue of just how large their respective inventories are: I believe iTunes wins there.

Hey, there are many sources of cheap, independent music. I use them. I like them. But to say that 500 albums at 5 bucks each represents "a far better deal" requires some suspension of reality.

Re:Worst case? (1)

flitty (981864) | more than 6 years ago | (#19720443)

One of the biggest record companies refuses to continue its relationship with the #1 distributor of digital online music, and it's tagged as a slownewsday? Is this because the post isn't about the iPhone?

THANK GOD IT'S NOT HORSECOCK! (-1, Offtopic)

Anonymous Coward | more than 6 years ago | (#19720461)

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Re:THANK GOD IT'S NOT HORSECOCK! (0)

Anonymous Coward | more than 6 years ago | (#19720839)

architectieir@janus.palacecommunity.com

Re:Worst case? (3, Insightful)

twitchingbug (701187) | more than 6 years ago | (#19720495)

Guess who wins? EMI.

If Universal thinks that people will buy from another online source than iTunes, let them try. That's competition. EMI felt differently, and will win and grab a larger market share. Honestly I've never paid any attention to which labels musicians signed with before. But now it'll becoming blindingly obvious who's in what camp.

Re:Worst case? (2, Insightful)

gowen (141411) | more than 6 years ago | (#19720781)

Dude, until recently anyone with a non-Apple mp3 player couldn't use iTunes without jumping through ridiculous hoops. Given how cheap commodity flash mp3 players have become, why would any company opt to cut themselves out of that market.

iTunes have established a download market. They've served their purpose and are now surplus to Universal's requirements.

Re:Worst case? (5, Insightful)

LordVader717 (888547) | more than 6 years ago | (#19720961)

No. Look where people go for their downloads. Especially, look at which store people buy DRM'ed tracks from.

If they want to keep the DRM, good look trying to sell it on anything other than iTunes with Fairplay. They'd be excluding themselves from the biggest market.
If they're prepared to sell DRM-free, and want more than Apple's $1.29, they're screwed too, cause customers don't like being fucked by price hikes.

The fact is that by breaking their relations with the biggest distributor of downloadable music, they're only screwing themselves.

Re:Worst case? (5, Insightful)

anotherone (132088) | more than 6 years ago | (#19720325)

Universal already has the option of going DRM-free with iTunes, and they haven't taken the bait. Anyway, they don't have an exclusive contract with iTunes. Your whole post makes no sense.

Re:Worst case? (0, Flamebait)

EveryNickIsTaken (1054794) | more than 6 years ago | (#19720381)

Universal already has the option of going DRM-free with iTunes, and they haven't taken the bait.
Yes - because they don't like what Apple was offering them, DRM-free or not.

Anyway, they don't have an exclusive contract with iTunes.
Well, I never said they did. What I said is that whichever competing 3rd party (or homegrown) service they move to would hopefully be non-exclusive.

Your whole post makes no sense.
You sir, are an ass.

Re:Worst case? (4, Informative)

astrosmash (3561) | more than 6 years ago | (#19720739)

Yes - because they don't like what Apple was offering them, DRM-free or not.

Right. And what exactly do they not like about their deal with Apple?

They want to charge you more for their music. They'd like you to purchase multiple tracks for each device you own, and they'd really like it if you couldn't burn those tracks to CD.

Your post makes no sense because Apple has no say in the dealings that Universal does with other on-line retailers. Yes, competition is great. Theoretically, if Universal was uncomfortable with iTunes' dominance in the marketplace they would make sweetheart deals with other on-line retailers to provide cheaper music with more freedom to drive people away from iTunes, and the consumer would win. But that is not what is happening, because they're just too greedy, and the other tech companies too easily roll over to the whims of the entertainment industry. iTunes is successful in part because they're the only ones who have stood up to the record companies.

Instead, Universal uses its dominant position to strong-arm more money out of companies like Apple and Microsoft -- you'll recall that Universal stayed out of the Zune music store until Microsoft agreed to give then a cut of the Zune hardware sales. That's all that this is about.

Re:Worst case? (1)

liquidpele (663430) | more than 6 years ago | (#19720873)

It's not even really about the price. They want Apple to license the tech for their ACC files so other players besides iPods can play the music. But Apple won't do that because it would hurt their hardware business. Basically, the two companies goals are not compatible here. If the iPod and other apple products start seeing serious competition in the hardware section, expect for iTunes to stop being the number one music store. I don't want to have to burn/rip or buy some conversion shareware to put my legal music on my $30 mp3 player I use to job.

Re:Uh... what are you thinking? (2, Insightful)

drhamad (868567) | more than 6 years ago | (#19720339)

Uhh... Universal has deals with others. This doesn't change that. This makes LESS options, not more. It certainly isn't a positive for DRM-free music, where iTunes leads the charge, as far as major labels go, since signing the EMI deal. Universal definitely wants DRM.

Universal wants to be able to up prices where it thinks it can get more money. Apple isn't letting them do that. How do you see it as a positive that they're going to go to someone who does?

Uh, this is what I'm thinking. (4, Funny)

PopeRatzo (965947) | more than 6 years ago | (#19720541)

Like I needed one more reason to download all my music via bittorrent from my favorite trackers.

Re:Uh... what are you thinking? (5, Insightful)

norminator (784674) | more than 6 years ago | (#19720651)

Universal wants to be able to up prices where it thinks it can get more money. Apple isn't letting them do that. How do you see it as a positive that they're going to go to someone who does?

Not to mention, Universal wants money from each iPod sold [slashdot.org] , just like they get from the Zune [slashdot.org] , (and they've been asking for that since before the Zune deal was announced). For some reason, they think that they deserve that, even though they didn't design the electronics, or the UI, and iPods are not sold with any Universal Music on them, and don't in any way require Universal Music to function correctly.

Re:Uh... what are you thinking? (0)

Anonymous Coward | more than 6 years ago | (#19720911)

"Universal wants money from each iPod sold, just like they get from the Zune"

Well see - Microsoft could do this because they knew they wouldn't have to give Universal any money. :-).

Re:Uh... what are you thinking? (5, Insightful)

CastrTroy (595695) | more than 6 years ago | (#19720919)

MS need to give money to people just to jump on their bandwagon, because the service wasn't popular, and they needed to give the labels a reason to join their service. iTunes on the other hand is extremely popular, and doesn't need to make stupid deals like giving away a percentage of iPod profits to music companies. Universal is already getting a percentage of the music sales they get from iTunes, and that is all they should get.

Re:Uh... what are you thinking? (2, Funny)

Paradise Pete (33184) | more than 6 years ago | (#19721079)

Not to mention, Universal wants money from each iPod sold

I think Apple should demand money from Universal for each CD purchased. After all, chances are that it's going to end up on an iPod anyway.

Re:Worst case? (1)

TheRaven64 (641858) | more than 6 years ago | (#19720345)

Any Universal shareholder out there? I have looked for music a few times on the iTunes store recently. Some of it has been there, but not on iTunes Plus, and so I have not bought it. The only music I will buy is DRM-free, either on CD or from iTunes Plus. Typically, I am too lazy to buy CDs, which means most music I buy is from iTunes Plus. I've bought more music since it launched than in the six months prior. Aren't companies legally obliged to try to maximise profits? I seem to recall this being used to justify bad behaviour, why isn't it used for good behaviour?

Re:Worst case? (1)

catbutt (469582) | more than 6 years ago | (#19720759)

Aren't companies legally obliged to try to maximise profits? I seem to recall this being used to justify bad behaviour, why isn't it used for good behaviour?
Well, I don't know if that is true really...sure they have a long term obligation to shareholders, but in the case of bad behaviour, choosing the "bad" route may lessen profits in the long term if it harms their reputation.

As for your "good behaviour" scenario...well, you haven't exactly offered proof that going DRM free will maximize their profits, except with regard to your purchases specifically. Not every music consumer happens to be a slashdot-reading anti-DRM advocate who makes purchasing decisions based on principles.

Not trying to defend them, and I am with you in that I only buy iTunes plus stuff anymore for the same reasons....but I think implying they are legally obligated to go DRM free due to fiduciary responsibility to shareholders is quite an extreme stretch.

Re:Worst case? (1)

CastrTroy (595695) | more than 6 years ago | (#19720767)

I've bought more music (and spent more money) on eMusic in the last 6 months than I did in the previous 5 years before I was on eMusic. No song is worth 99 cents. I don't care if the Pope is singing it. Bring down the prices, especially on the digital downloads, and you'll have tons more people buying the music. Differentiate CDs and digital downloads on price, any you'll see people stop downloading them illegally.

Re:Worst case? (3, Informative)

Drawkcab (550036) | more than 6 years ago | (#19720377)

iTunes isn't the one pushing DRM, its the record labels like Universal who insist on it. Apple knows its customers don't like DRM and they'd sell more without it, but the copyright holders are the ones worried about losing revenue in the long term without DRM. You've got it completely confused.

Re:Worst case? (2, Interesting)

CastrTroy (595695) | more than 6 years ago | (#19720787)

I really don't understand this. Almost all the CDs sold in the last 20 years had no form of DRM. And they weren't scared then. What all of a sudden makes them want to sell everything. If they'd focus more on making quality music, and delivering it at a fair price, then they wouldn't have problems with people pirating music.

Re:Worst case? (0)

Anonymous Coward | more than 6 years ago | (#19720379)

I'd like to see Universal sign with someone else (hopefully a non-exclusive, DRM-free deal.)

If they wont' give Apple a DRM-free deal, what the fuck makes you think they'd give any other store a DRM deal???

Re:Worst case? (1)

EveryNickIsTaken (1054794) | more than 6 years ago | (#19720433)

When *insert random media/IT conglomerate* starts driving over dumptrucks full of cash, then Universal would budge. Seriously people, you need to stop licking Apple's balls.

Re:Worst case? (1)

Quiet_Desperation (858215) | more than 6 years ago | (#19720595)

I'd like to see Universal sign with ... hopefully a ... DRM-free deal.

Uh, that would be Apple, sport. Jobs is the one publically urging the labels to drop DRM.

Re:Worst case? (1)

Scrameustache (459504) | more than 6 years ago | (#19720699)

I'd like to see Universal sign with someone else (hopefully a non-exclusive, DRM-free deal.)
If wishes were horses we'd all be eating steak right now.

Old news here (-1, Offtopic)

Anonymous Coward | more than 6 years ago | (#19720263)

I read this on my iPhone 3 hours ago

Old Comment Here (-1, Offtopic)

Anonymous Coward | more than 6 years ago | (#19720315)

I read this on my iPhone 3 hours ago.

I read the comment you posted from your iPhone 3 hours ago on Friday night after I bought and activated my iPhone.

Re:Old news here (0, Offtopic)

ADHDYoshi (1101883) | more than 6 years ago | (#19720453)

I'm posting this comment from my Nintendo DS, using the text browser in dslinux.

Re:Old news here (-1, Offtopic)

Anonymous Coward | more than 6 years ago | (#19720741)

Well you can just suck my balls Kyle

Re:Old news here (-1, Troll)

Anonymous Coward | more than 6 years ago | (#19720805)

When will the world see? Where the nigger runs the show, corruption and suffering run rampant.

Could they not have given a better copmarison... (1)

JamesRose (1062530) | more than 6 years ago | (#19720271)

of the effects. Here's what I mean

Exibit 1> "Both sides stand to lose out with 1/3 of of new releases coming from Universal" "and an estimated 15% of Universal's sales coming from digital downloads." An orange

Could they not have found a better statistic like, % of Universals sales, and % of Apple's sales of Universal films out the total number of films, cos the way it is here, it is the number of titles Apple releases of Universal, they aren't necessarily as popular as other new releases.

WooHoo (0, Flamebait)

Anonymous Coward | more than 6 years ago | (#19720295)

Now maybe others will follow Universal's lead. Then Apple will finally crumble! WOOHOOO!

Re:WooHoo (1)

JimDaGeek (983925) | more than 6 years ago | (#19720957)

Why? So we could all be stuck with ugly Zune that use crappy MS-Only DRM? No thanks.

Oh, and what MS marketing droid came up with the term "squirt"? Seriously, how could some MS marketing drones think that people would "dig" the phrase, "squirt"? Hey babe, wacha listening to? Cool, could you "squirt" that to me?... Slap! "Squirt" a song and 3 days later the "squirt" is gone! "Squirt"... every time I think of that and the Zune I laugh.

Yo dog, what ya doin?.... Not much, just "squirting" with my boyz.

Universal? (3, Insightful)

Karganeth (1017580) | more than 6 years ago | (#19720301)

Aren't they also the only company exclusively backing the doomed HD-DVD format? Stupid businesses make stupid decisions.

Doomed? (0, Redundant)

rollthelosindice (635783) | more than 6 years ago | (#19720685)

The porn industry chose HD-DVD over blue ray. Ask Betamax if the porn industry has any pull with that sort of thing.

Re:Doomed? (1)

HolyCrapSCOsux (700114) | more than 6 years ago | (#19720809)

There was a fundamental difference in VHS v Batamax and Bluray v HD-DVD. VCRs were a completely new thing. Whereas now, there is already a digital video standard that nearly everyone has. (DVD)
Whereas, back in the day, there was no widely used video format for home use for playing back movies (other than the home variety)

Re:Universal? (3, Interesting)

illegalcortex (1007791) | more than 6 years ago | (#19720837)

Wiki says HD-DVD is exclusively backed by The Weinstein Company/Dimension Films (through Genius Products), and First Look Studios. A number of Warner's releases have been HD-DVD only. And then there are the non-content companies who are exclusively backing HD-DVD: Toshiba, NEC, Sanyo, Microsoft, RCA, Kenwood, Intel, and Memory-Tech Corporation.

Personally, I think it's a bit early to be deciding who is doomed and who isn't. I think it's just as likely that both formats are doomed and there will be a "winner" only in the same way that laserdisc "won" the battle to be the next video medium after VHS. It was the format to use, there were just a low percentage of people interested in it.

This is nothing more than (5, Insightful)

Pendersempai (625351) | more than 6 years ago | (#19720309)

empty posturing. What does Universal lose by signing a short-term contract instead of a long-term one? Probably nothing. What do they gain? Marginally more credibility in the back-and-forth threats between Apple and the record companies. Wake me up when they explicitly threaten to cancel their contract and remove their media from iTunes if an express list of demands is not met. Until then, it means nothing. And even then, they'll likely return to the bargaining table before pulling the plug. Both sides know where their interests lie, and neither wants to pull the plug.

My long-term prediction? More of the status quo. Both sides are winning, and there is no external stimulus that seems like it might upset the equilibrium that has developed. Apple doesn't want to lose a third of its collection, and Universal doesn't want to be tied to the misfits and rejects that compose the rest of the playing field.

Re:This is nothing more than (3, Insightful)

TubeSteak (669689) | more than 6 years ago | (#19720901)

Wake me up when they explicitly threaten to cancel their contract and remove their media from iTunes if an express list of demands is not met. Until then, it means nothing.
When heavy hitters engage in diplomacy, they usually make lots of small incremental steps.

It isn't enough to show Apple that they're serious, they want the rest of the industry to see that these steps can be taken without ruining their business. The ultimate goal is to restructure Apple's relationship with the entire music industry, not just with Universal.

If you see this as just an empty threat, then you aren't looking very far down the road.

Most likely negotiation tactics or... (5, Insightful)

theolein (316044) | more than 6 years ago | (#19720311)

The most likely answer is that Universal, whose bean counters are not dumb enough to drop fully 15% of their sales to spite Apple, is simply making noises to negotiate a better deal.

The other possibility is that Bill Gates, in utter desperation because the Zune is such a piece of crap, has offered to pay Universal for exclusive content for the Zune. I would seriously not put it past Bill G and Steve B to do something like this. It would be a really bad day for Apple if this did happen, because it would make the Zune more popular and the iPod less popular.

Of course, it could backfire heavily against both Microsoft and Universal if Zune sales don't grow significantly.

Re:Most likely negotiation tactics or... (5, Insightful)

russotto (537200) | more than 6 years ago | (#19720385)

Apple, on the other hand, probably IS willing to drop Universal's catalog from iTunes if Universal gets unreasonable. Which is the more likely thought process?

1) Oh, Universal's music is no longer available on iTunes. I'll buy this piece of crap Zune instead of the cool new iPod Femto

or

2) Oh, Universal's music is no longer available on iTunes. I'll have to <strike>pirate it like there's no tommorrow</strike> rip it from CD onto my iPod

Re:Most likely negotiation tactics or... (2, Insightful)

BryanL (93656) | more than 6 years ago | (#19720611)

With ipod's installed user base and looking at life before the iTunes store, it might mean more CD sales and going back to ripping from CDs to get the music on an iPod. Or it could mean more P2P downloading of Universals music (I.E. pirating). Exclusive deals for the Zune are not necessarily in Universals best interest nor will it necessarily hurt Apple.

Re:Most likely negotiation tactics or... (1)

Locutus (9039) | more than 6 years ago | (#19720773)

also remember that Universal is backing HD-DVD which is also a Microsoft supported video format...

It looks like Universal is a full fledged 'partner' of Microsoft in both music and video and they are drawing the line in the sand with regards to other partners because of their deals with Microsoft.

LoB

Re:Most likely negotiation tactics or... (1)

JimDaGeek (983925) | more than 6 years ago | (#19721095)

How would Zune-exclusive songs make the Zune more popular? People don't like the Zune. It is ugly and has MS-Only DRM.

If people cannot buy what they want, they will find other ways. More than 100 million iPods have been sold and more are still going out the door every day. Do you think all those users will just drop the iPod and buy a Zune? If they wanted a Zune, they would not have gotten an iPod. So having MS Zune-only stuff that people want will just make people either go and and buy and rip a CD or turn to P2P.

Exclusive console games work because if a game doesn't run on a console, there is not much users can do. They can't reprogram the game themselves. In contrast, on a portable player all one needs to do is get an mp3 rip and they are golden.

That'll sure help the A/R folks out... (4, Insightful)

EricTheGreen (223110) | more than 6 years ago | (#19720323)

Unsigned Band with break-out potential: "So, we sign with you...and our record won't be up for sale on iTunes?"
Universal A/R dude/dudette: "Yep, that's right."
Unsigned Band with break-out potential: "So any unit sales revenue we see from you will be from Wal-Mart and Best Buy sales, nothing else?"
Universal A/R dude/dudette: "Uh huh."
Unsigned Band with break-out potential: "Losers. Next!"

Re:That'll sure help the A/R folks out... (4, Insightful)

badasscat (563442) | more than 6 years ago | (#19720457)

Unsigned Band with break-out potential: "So, we sign with you...and our record won't be up for sale on iTunes?"

You're assuming major labels are still out there trolling nightclubs for "unsigned bands with break-out potential".

More often what they're doing is hitting up their local malls and "recruiting" teenage girls (or in the case of boy bands, teenage boys) to actively "break" as the next pop star. These girls and guys had nothing going for them (except cheerleader looks) before, so why would they turn down the promise of riches just because the songs some producer wrote for them to lay their heavily processed vocals over won't be on iTunes? If they do, hey, there's plenty more at the mall they came from.

Re:That'll sure help the A/R folks out... (2, Insightful)

EricTheGreen (223110) | more than 6 years ago | (#19720783)

Oh, they're still trolling the bars, absolutely, and that won't change anytime soon. What the greenlighting people _are_ doing differently now, for certain, is closely qualifying what "breakout" means to them, in terms of risk of the act. As many others have noted, it's a lot harder these days to get signed and nobody, no one, is given any development runway anymore--disc #1 needs to sell {x} units minimum or your toast. It's a sad loss all the way around.

To your point...the recruiting/packaging you mention does take place, as you describe. And it won't change. And it's a sad addition all the way around. {grin} But a quick scan of the iTunes storefront shows a lot more than just the boy/girl band du jour. Plenty of other acts and genres and reducing them down to one level 98 Degrees of Boys to 'Sync isn't going to happen.

Re:That'll sure help the A/R folks out... (3, Insightful)

morari (1080535) | more than 6 years ago | (#19720475)

Unsigned Band with break-out potential: "So you'll bring in your own producer and mixer to push our style more toward what you think people want to hear?"
Universal A/R dude/dudette: "Yep, that's right!"
Unsigned Band with break-out potential: "We'll loose all creative control and have next to no say in what we put out, but we're guaranteed to have at least one initial single because you own all media outlets like radio stations, television and most stores?"
Universal A/R dude/dudette: "Uh huh."
Unsigned Band with break-out potential: "We'd be losers if we didn't sell-out. Hand me that contract!"

Re:That'll sure help the A/R folks out... (1)

EricTheGreen (223110) | more than 6 years ago | (#19720615)

Seems you've read the Albini essay as well.... {grin} True, if you're desperate enough to be "broken", the labels can play you in precisely the way you write.

I do think more unsigned acts are becoming savvier in general these days regarding the mechanics of their business. If nothing else, they're certainly aware that there's more than one label in town to ply their services to. My point was Universal would just be putting themselves at a disadvantage with this, compared to their competition. And all it's going to take are a couple cases of some act being broken big through a competitor and that will be all the other bands hear/see in the short term.

I don't really get what benefit they'd realize from pulling out, unless this is just a negotiating tactic (which certainly could be the case.) Even then, though, iTunes is probably approaching a scale at which they could weather the loss of revenue (albeit with difficulty).

Re:That'll sure help the A/R folks out... (1)

stuntpope (19736) | more than 6 years ago | (#19720547)

Unsigned band who sees their first major-label contract as their shot at the big time and all their dreams come true: "Where do we sign? We brought our peeeens!"

Minor correction(s) (4, Insightful)

Overzeetop (214511) | more than 6 years ago | (#19720649)

Unsigned Band with break-out potential: "So any unit sales revenue we see from you will be from Wal-Mart and Best Buy sales, nothing else?"

Universal A/R dude/dudette: "No, of course not. You will never see sales revenue because we will cook the books so that you never see a penny. But you are othewise correct - the unit sales revenue you will never see will only come from Wal-Mart and Best Buy."

Unsigned Band with break-out potential: "Where do we sign?"

Re:That'll sure help the A/R folks out... (1)

elrous0 (869638) | more than 6 years ago | (#19720695)

You forgot the ending:

Universal A/R dude/dudette: "Oh well, we were going to give you this big check and this mansion we rented for you, but if you just want to go back to your grungy nightclub and living in your van, go right ahead."
Unsigned Band with break-out potential: "Should we spit or swallow?"

Re:That'll sure help the A/R folks out... (1)

Lumpy (12016) | more than 6 years ago | (#19720769)

Correction on your above conversation.

What you want to sign us??? AWESOME!!!!! where do we sign??

Bands dont bother to read the contract. Most get pissy after they discover that the record company is screwing them hard and they actually owe them several million after their record goes platinum.

BAND: what do you mena we're broke?
RECORD EXEC: you are out of money and because you are not writing a new album we are cutting off your credit line.
BAND: that's not fair! we want out!
RECORD EXEC: no problem, just abide by your contract. All your songs are ours, your name even your likeness and your trademark of throwing balloon phallasus at the crowd is ours...
BAND: YOU SUCK!
RECORD EXEC: Yes I do, no when are you going to start the new album?

Re:That'll sure help the A/R folks out... (1)

Paulrothrock (685079) | more than 6 years ago | (#19720799)

Any unsigned band would be better off going straight to the Internet. Record companies can't do any more these days than an independent record producer in terms of recording quality, and since the cost of distribution is essentially nil, the only thing they'd be getting from a "normal" record company is promotion and songwriters. And if they don't mind doing their own promotion and write their own songs, this isn't a problem.

Case in point: Jonathan Coulton. He has said he makes as much as a signed band like the Dresden Dolls even though he's doing all of the scheduling, recording, songwriting and touring by himself.

Re:That'll sure help the A/R folks out... (1)

moosesocks (264553) | more than 6 years ago | (#19720823)

Wal-Mart and Best Buy do not stock up-and-coming or "breaking" bands.

They stock the Top 40. And Country. That's it. I've actually come to appreciate my local independent record store, and started shopping there a few months ago, after a few years hiatus. They treat you well, and usually throw in a free poster or sampler if you spend more than ten bucks.

Re:That'll sure help the A/R folks out... (0)

Anonymous Coward | more than 6 years ago | (#19720923)

My god are you an idiotic fanboy.

I think saying "worst case" is very shortsighted (1)

CaptainPatent (1087643) | more than 6 years ago | (#19720329)

Universal (unlike many other vendors) probably recognizes the market for non-DRM music is huge while at the same time DRM sales are widely being rebelled against. While there is still room for the debate to be resolved, hopefully it's a further push away from DRM.

Re:I think saying "worst case" is very shortsighte (1)

drhamad (868567) | more than 6 years ago | (#19720375)

How do you figure? They aren't going to go to a non-DRM store - they're on lots of stores, all of which are DRM. And Apple's iTunes Music Store already offers them the option of not having DRM. They explicitly rejected it. They want DRM.

Re:I think saying "worst case" is very shortsighte (0)

Anonymous Coward | more than 6 years ago | (#19720889)

It is much more likly an attempt by Universal to rescue DRM. If we can bluff the contract until we convince Apple to licence thier DRM to other players we can force the DRM issue out of this ipod/no-ipod issue.

That might be enougth to force a single DRM standard breaking the whole I dont want DRMed music because I want to play my music on any device.

I cant see it working entirly but i can see universal trying it as a attempt to not be pulled down the EMI no-drm path.

Universal shoots itself in the foot. Film at 11. (3, Insightful)

sehlat (180760) | more than 6 years ago | (#19720331)

Let's see: Universal is unhappy with Jobs' position on pricing and want to have their OWN Digital-Consumer-Disablement crippled service with higher prices than Apple and, since Apple won't license the DCD, it will have to be incompatible with the iPod, which is as close to a player monopoly as you can get without the Feds landing on you with an army of antitrust lawyers.

They think this is good for them HOW?

Re:Universal shoots itself in the foot. Film at 11 (4, Insightful)

Cadallin (863437) | more than 6 years ago | (#19720455)

Hold on, Hold on. The iPod is NOT a prosecutable monopoly. It's a natural Monopoly. Which is to say, it arises because that just what consumers are buying. There is not illegal about that at all. It is 100% legit. It is only illegal to use a monopoly in one area to force a monopoly in another. Like Microsoft using their Monopoly in Operating Systems to shut Corel out of the market for Office Suites. Like Microsoft using their Monopolies in Operating Systems and Office Suites to secure a Monopoly in the Browser Market. That's illegal. iPod/iTunes is not, despite complaints by overzealous European prosecutors. There are LOTS of (legal even) ways to get music onto an iPod. Buying CDs for one. Plenty of Musicians are distributing music themselves in MP3 or FLAC (which can't be played on an iPod Shame on you Apple! But FLAC can be converted to other formats that can be played on an iPod). iTunes Music Store "Lock-in" in pretty poor to be honest. The vast majority of iPod users are not filling up their iPods on ITMS purchases.

Re:Universal shoots itself in the foot. Film at 11 (1)

mean pun (717227) | more than 6 years ago | (#19720963)

Hold on, Hold on. The iPod is NOT a prosecutable monopoly. [Snipped Microsoft examples] That's illegal. iPod/iTunes is not, despite complaints by overzealous European prosecutors.

But those European prosecutors are upholding the laws of their own country, not US law. It is quite possible that what is legal in the US is illegal in the country of those `overzealous prosecutors'.

Re:Universal shoots itself in the foot. Film at 11 (1)

jimicus (737525) | more than 6 years ago | (#19721075)

How the iPod became the dominant MP3 player isn't really the point.

The point is, Universal want an alternative online market, they don't like the one provided by iTunes. Unless they're prepared to drop DRM as a requirement and have whoever sells their music sell it as straight unencumbered MP3s (or something else the iPod can easily be persuaded to play), they're essentially cutting off online sales from most of the portable MP3 players out there. Why?

FWIW, I wouldn't be surprised if they are trolling for a new agreement - one which suits them better.

My Mac Sucks (-1, Troll)

Anonymous Coward | more than 6 years ago | (#19720341)

I don't want to start a holy war here, but what is the deal with you Mac fanatics? I've been sitting here at my freelance gig in front of a Mac (a 8600/300 w/64 Megs of RAM) for about 20 minutes now while it attempts to copy a 17 Meg file from one folder on the hard drive to another folder. 20 minutes. At home, on my Pentium Pro 200 running NT 4, which by all standards should be a lot slower than this Mac, the same operation would take about 2 minutes. If that.

In addition, during this file transfer, Netscape will not work. And everything else has ground to a halt. Even BBEdit Lite is straining to keep up as I type this.

I won't bore you with the laundry list of other problems that I've encountered while working on various Macs, but suffice it to say there have been many, not the least of which is I've never seen a Mac that has run faster than its Wintel counterpart, despite the Macs' faster chip architecture. My 486/66 with 8 megs of ram runs faster than this 300 mhz machine at times. From a productivity standpoint, I don't get how people can claim that the Macintosh is a superior machine.

Mac addicts, flame me if you'd like, but I'd rather hear some intelligent reasons why anyone would choose to use a Mac over other faster, cheaper, more stable systems.

Re:My Mac Sucks (2, Funny)

jcr (53032) | more than 6 years ago | (#19720505)

Wow, time warp. I haven't seen a Mac 8600 or a 486/66 in about a decade. Where are you, in a barn next to a Model T and a steam tractor?

-jcr

Re:My Mac Sucks (1)

mcguirez (524534) | more than 6 years ago | (#19720883)

I think it's from a troll-bot that uses a search engine without parsing any dates.

A quick stroll down memory lane (thanks Google) yields one date of "November 25, 1998 at 08:25 am" That's nearly 9 years (which is like 2^9 in computer years) but even in 1998 these were old, old systems.

See: http://www.kottke.org/98/11/my-mac-sucks [kottke.org]

Re:My Mac Sucks (1)

Divebus (860563) | more than 6 years ago | (#19721027)

Ahh... don't feed the troll. He copies and pastes the same crap every other month and I've seen this one multiple times.

Re:My Mac Sucks (1)

TheRaven64 (641858) | more than 6 years ago | (#19721111)

I haven't seen a Mac 8600 or a 486/66 in about a decade.

I think I have one in my attic, along with half a dozen 6100s. Do you want one?

Re:My Mac Sucks (-1, Offtopic)

Anonymous Coward | more than 6 years ago | (#19720659)

When Apple announced their Mac mini last week for US$499, it caught my eye. Wanting to buy/build a small PC for my already cramped breakfast bar, I started pricing out similar PC hardware. The results startled me. It was very difficult to price a PC as small (6.5" x 6.5" x 2") as the Mac mini with comparable equipment cheaper than the Mac mini. Indeed, most of the configurations I found were more than the humble $499 of the Mac, often much more. To match price I often had to configure with a much bigger shuttle-style case. What computers are currently on the market to compete with this? When my wife asks for the 'cute little Mac', what PC can I buy instead that will take up as little space and do as much for the same price (or less)?"

Re:My Mac Sucks (1)

Paulrothrock (685079) | more than 6 years ago | (#19720885)

How long was this post in the message buffer? The 8600/300 came out in 1997! Maybe if you used comparable systems, you'd have an argument.

Oh Apple Oh Apple We WUV WOO (1)

stratjakt (596332) | more than 6 years ago | (#19720397)

"Both sides stand to lose out with 1/3 of of new releases coming from Universal and an estimated 15% of Universal's sales coming from digital downloads. Apple's market share is about 75% of digital downloads, and digital downloads are growing while CD sales are shrinking."


Both sides stand to lose? You try to make it sound like iTunes is the only way to download content on the 'net.

iTunes may have good marketshare now, but it's eroding. It was, for all intents and purposes, the only player in the game. It is no longer.

So Apple is trying to build a monopoly on distribution of content, and the providers are bucking. If anyone but Apple were involved, this would be good news.

The insinuation that media cannot survive without Apple is, at least I very much hope it is, ridiculous.

I do not want Steve Jobs or anyone else being the guy who decides what, when and how I watch something.

Doesn't really mean much for Apple (1)

Steffan (126616) | more than 6 years ago | (#19720413)

I don't really see this as a big deal for Apple. They're [allegedly] not making much money off of music sales on iTunes. It may help bolster the popularity of the service, but does anyone really believe that all of the existing iPod owners are going to abandon ship should Universal decide to pull out completely?

There are two likely scenarios should Vivendi/Universal drop iTunes:

1) They switch to a competing DRM format with no compatibility with iPods: Users download content from peer-to-peer services / rip CDs and continue to use their players.

2) They switch to a competing store with non-DRM tracks: Users buy tracks and copy them to the iPods. Or, if the prices are much more than they are now, see #1

simple really (-1, Troll)

Budenny (888916) | more than 6 years ago | (#19720447)

Simple really. They are not selling enough through iTunes to make it worthwhile. This is because iPod people do not buy many tunes. So they figure, we are losing more to piracy than we are making. Now, lets see, what if we sold non-DRM that would play on anything. Would that be better or worse? Probably better. We could hardly lose more to piracy than we are now. But why rush it? In the meantime, lets go month to month while we do a bit more research and see which way the cat will jump. And whether iPhone will sell.

Personally, I think its the first of the spring cracks in the ice. I don't think the iPod iTunes locked business model will last much longer. Like, not more than a year. Just like the locked iPhone model will not, and I think with Leopard we will see the locked OS model fall to bits. But we will see.

Re:simple really (1)

AccUser (191555) | more than 6 years ago | (#19720831)

How exactly do you envisage the locked OS model fall to bits with the launch of Leopard?

Re:simple really (0)

Anonymous Coward | more than 6 years ago | (#19720843)

You do know that they can sell non-DRM files through iTunes right now, right? I think there might have been one or two articles about it somewhere.

As far as iTunes users not buying many songs, wasn't there just an article about iTunes being the 3rd largest seller of music just a couple of weeks ago?

Load of Hooey (5, Insightful)

Nom du Keyboard (633989) | more than 6 years ago | (#19720469)

Edgar Bronfman Jr., the chairman of Warner Music Group, reinforced that idea at a recent investor conference, saying "we believe that not every song, not every artist, not every album, is created equal."

And yet you sell all your CD's at $16.99 regardless of that fact now, don't you?

At the same time, Mr. Jobs has refused the industry's calls for Apple to license its proprietary copy restriction software to other manufacturers. Music executives want the software to be shared so that services other than iTunes can sell music that can be played on the iPod, and so that other devices can play songs bought from iTunes.

Another load of crap. iPods can play music from any other DRM-free music seller. This joker wants you to believe iPods only play iTMS music, which is a lie. And iPod owners would likely buy music from other sources if: 1) It didn't have yet another, incompatible, version of DRM; 2) It was priced right; 3) It was the music they wanted to hear; 4) It had a nice interface to easily purchase and load said music onto their iPod. The record companies themselves are the ones to blame here.

You know, It's the DRM, stupid!

I just don't see it working out for Universal (3, Insightful)

MikeRT (947531) | more than 6 years ago | (#19720507)

Losing 15% of your income is a lot of money when you are that big. That's about the point that shareholders want to hear about cost-cutting measures to regain what they have lost--namely downsizing and such. For Apple, it would be a blow, but it would also not be nearly as bad because they still have so many content providers to work with.

If Apple and Universal cannot come to an agreement, Apple should bide its time, wait for them to weaken and strike. Buy out their catalog for a cool few billion dollars in cash and license it exclusively through the ITMS.

This is Off Topic and I don't care.... (-1, Offtopic)

StingRay02 (640085) | more than 6 years ago | (#19720527)

It's WORST case scenario, not worse case. And as long as I'm going to get modded down, allow me to bitch about something else. The past tense of lead (leed) is led! Lead (led) is a freakin' metal, not a verb. Today I lead you down the path to hell. Yesterday, I would have led you down the path. Get unhooked from Phonics already.

OK - Here's a thing (5, Funny)

Quiet_Desperation (858215) | more than 6 years ago | (#19720563)

But some music executives have been chafing at the flat rate

Well, Universal, here's *my* new flat rate for any of your artists.

$0.00

I call it the Interwebs Discount.

Happy now?

And there isn't a damn thing you can do about it.

Nose, meet spite (2, Insightful)

HardwarePeteUK (850316) | more than 6 years ago | (#19720567)

Cutting off one's nose to spite one's face is so appropriate. Both parties here are just trying to get more money out of the other.

Truly hilarious.

Re:Nose, meet spite (1)

Vitaliy (782601) | more than 6 years ago | (#19720785)

There is nothing wrong with making money, or wanting to make money.

Universal are playing hardball to get the upper hand in negotiations. This would allow Universal to charge more, or get a bigger cut from Apple, while keeping DRM on the tracks. Apple are pushing for lower prices and DRM free tracks because it would make the current users happier and attract new users from the competition.

Making money while screwing the user is one thing, making money while doing a good job is another... big difference.

Which DRM to use? (5, Interesting)

Animats (122034) | more than 6 years ago | (#19720637)

The problem with music DRM, from the music distributor perspective, is that it's too closely tied to player vendors. There's the iPod and the Zume, and in both cases the player manufacturer takes a cut of the revenue. UMG, reasonably enough, wants to cut the player manufacturer out of the revenue stream.

Microsoft has orphaned "PlaysForSure", which, for a while, looked like an option. Or at least Microsoft tried. WalMart went with PlaysForSure, and they might insist that Microsoft keep supporting it.

What really matters is what WalMart does. If the music industry doesn't come up with a good solution, Bentonville may dictate one. Their site currently says The Apple iPod and Microsoft Zune digital media players do not currently support protected WMA-format files, and will not play Wal-Mart Music Downloads. Walmart.com has a large selection of WMA-/DRM-compatible digital music players available at great prices.

WalMart, remember, sells online music at $0.88/song, below Apple and Microsoft. And they're not going to raise their prices.

Re:Which DRM to use? (2, Insightful)

UnknowingFool (672806) | more than 6 years ago | (#19720999)

The problem with music DRM, from the music distributor perspective, is that it's too closely tied to player vendors. There's the iPod and the Zume, and in both cases the player manufacturer takes a cut of the revenue. UMG, reasonably enough, wants to cut the player manufacturer out of the revenue stream.

If anything, music companies benefit revenue-wise from digital sales. Unlike physical medium like CDs, the distribution and manufacturing costs are minimal. And any infrastructure costs are borne by these player vendors not by the music company. The only costs that music distributor has are costs that they always have had like marketing and promotion. For iTunes $0.70 of every $0.99 goes to the music company. The other $0.29 goes to Apple which has to pay for the distribution system. So the music companies have made like $1.4 billion on iTunes alone, and all they had to do was provide Apple with the digital masters. I do not think is reasonable for Universal to want more.

Re:Which DRM to use? (1)

DannyO152 (544940) | more than 6 years ago | (#19721021)

I'm guessing that to support a lower cost to customers, Wal-Mart has negotitated lower per unit royalties with the recording company. I don't see them seeing this as a must-get market which makes it worth losing money. So, if the real news is that sales of physical cds have declined and digital revenues have not fully replaced lost cd revenues, selling exclusively at Wal-Mart looks like a classic digging deeper to get out of the hole tactic.

Meanwhile, if cost is what matters, why has Wal-Mart not become the digital music store?

Microsoft's hand is obviously behind this one. (0, Flamebait)

w3woody (44457) | more than 6 years ago | (#19720641)

Clearly Microsoft' hand has to be behind this one.

A music company is only in the business to sell music. Period. The only reason why a music company would be interested in making sure a distributor could support multiple devices (such as Apple's iTunes opening it's DRM technology so you can play iTunes bought music on a Zune) would be because the volume of music being sold through that distributor didn't justify the administrative overhead of dealing with Apple. As Apple is in third place, this isn't the case.

The only other issue I can think of is Apple's insistence upon fixed pricing--and if companies like Universal don't like that, they could always delay the rollout on iTunes until after CD sales have hit. So the problem is solvable under the current contract regime--and it would also help music stores, by causing people to go through music stores for the monster breakout hits.

No; there is no rational reason why Universal would make the noise they're making--unless they're trying to figure out how to crack the nut of breaking Apple's monopoly for their Redmond masters...

Record industry is dying (2, Insightful)

athloi (1075845) | more than 6 years ago | (#19720657)

It was never a sane business model. The value of most CDs is their novelty and hype potential, not the music inside, which is mostly pointless goop for easily-distracted people. They're not going to make a killing any longer, since the means of distribution have now surpassed the means of production. Universal and Apple fighting over a miniscule advantage in a collapsing industry is a sure sign that the entertainment industry has no clue where to go now that its product is no longer scarce by the nature of its distribution.

vivendi/universal is an idiot outfit (1)

swschrad (312009) | more than 6 years ago | (#19720671)

sad, but true. since Bronfman bought 'em (well, most, somehow the original owner always seems to maintain a significant position in the business that disgusted them these days,) universal music has been a pox. snarling and cheering on the RIAA attacks, moaning about wanting a fee from the music player industry, wanting to charge a premium for the songs from the latest manufactured limited-time "band."

it may or may not be noteworthy to consider that Bronfman had the Seagrams liquor business almost whole, and sold out of that proven profit generator because it wasn't cool enough for him. of course, the sin business remains constant, because you got to sin to be saved... while the whole foundation shift under the entertainment industry should have told any credible analyst that the old business models were invalid.

in short, universal is a tantrum a day looking for a place to attract attention, and today's foot-stomper is iTunes. they're running away from the proven viable moneymaker that roiled the industry. I assume they'll resort to the old-time business juicer of re-issuing back CDs with new jackets, and costing two bucks more than last year.

which will be a complete laugher.

What happens to DMR'd music from Universal? (0)

Anonymous Coward | more than 6 years ago | (#19720677)

Will my tunes I bought from that label quit working once the agreement ends? I certainly hope not!

just posturing (1)

stwf (108002) | more than 6 years ago | (#19720681)

I truly doubt Universal intends on going a non-DRM route. This among the stupidest record companies out there. And thats saying something. Its either an extortion attempt for higher prices from Apple or they are being offered ALOT of money to go Zune only or some such nonsense.

Sounds most likely to me like they want to raise prices and Apple won't let them UNLESS they drop the DRM, like EMI. Especially with the iPhone success and the upcoming widescreen ipods I can't imagine Apple would ever back down.

I'd also imagine the Universal artists would rebel about not having their music available for the device they'll all be carrying... So I have no doubt this will be resolved with all music intact at least, or even better they can be convinced to go DRM free to get their extra bucks....

Just think of the lost revenue. (0)

Anonymous Coward | more than 6 years ago | (#19720683)

Universal Exec's must be wearing tinfoil hats, cuz they are killing a current and future revenue steam. But don't worry the CEO is probably good for an extra 300 million in Stock Options and Bonuses for this one, even if they do lose money on it.

Woot!!! (Score:0) cuz i am a Anonymous Coward...

Middlemen (4, Insightful)

petehead (1041740) | more than 6 years ago | (#19720705)

Great, two big companies fighting over their middleman territory. The artist who creates the product and the user who purchases it are just collateral damage.

dear music industry morons: (1)

circletimessquare (444983) | more than 6 years ago | (#19720763)

instead of coopting mapster, you buried it. what, you thought it was going to stay dead?

so some tech compnay reinvented it, instead of a music distribution company

oops

guess what? YOU could have controlled 75% of music downloads. instead, you have to kiss up to steve jobs. didn't have to be that way. the only reason it is that way, is because of your shortsighted stupidity on the future of the internet and music

oh well, you fucked up, you lose. deal with it

and your little game of brinkmanship here can only make steve-o smile. he knows he's the new focal point of power, not you. you will do what he says when push comes to shove, not visa versa. you stand to lose far more than him, and you know it

you could have kept your throne, but you blindered, and lost it. welcome to the slow process of extinction, music industry morons

Love apple, hate itms (1)

jaypaulw (889877) | more than 6 years ago | (#19720905)

I'm actually thrilled about this development as it derails itunes music store as a complete entertainment solution - which it seemed like apple was heading towards with appletv and everything.

I'm in the overwhelming minority of slashdot people who actually thinks that drm is a good thing, however, I hate the idea of it being tied to platforms.

I'd like a DRM system that is independent of content creators, distributors or hardware manufacturers.

DRM Licensing (3, Interesting)

sagefire.org (731545) | more than 6 years ago | (#19721121)

Apple's refusal to license their DRM

Oh, if only Apple would license their cross-platform DRM! I know this will be modded as off-topic BUT I wish Apple would license its DRM to the BBC! That way, the BEEB would have an easy way of distributing their content in a non-Windows environment and still satisfy their perceived DRM need. It still would not make a native Linux method of playing BBC content, but it is pretty easy to get iTunes (for example) to run under wine. So, though it is not a perfect solution, at least it would be better than what the BEEB is doing now

So, go ahead, mod me off-topic, but I am hoping to at least also get to be modded as interesting as well.

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