Universal does not renew iTunes contract
The Universal Music Group has told Macworld.uk that they have, in fact, not renewed their long term iTunes store contract. Universal has decided to continue showcasing their music in iTunes 'at will,' meaning that at any time they can pull their music from Apple's download service.Why would Universal do this? Considering that almost 1 out of every 3 CDs sold comes from Universal, I am sure they want to show their might and put Apple in its place. Will they abandon the iTunes Store? I doubt it, since they make lots of money off of it (though not as much as they would like, but isn't that always the case with the music companies?). This does mean that Universal might make certain music available from other retailers exclusively, something they couldn't do under their other contract with Apple.
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Reader Comments (Page 1 of 1)
Michael Curtis said 1:52PM on 7-05-2007
I don't really see this as a threat. Universal needs apple more than apple needs universal. Apple just breaks even on iTunes sales, mostly a service to iPod owners. Universal will be losing much more cash if they drop iTunes.
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Kevin said 2:02PM on 7-05-2007
I never considered that Universal might make their music exclusive from another retailer. Good point. I wouldn't be surprised to see some new Universal artists debut somewhere else at a higher price.
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Joshua Ochs said 2:07PM on 7-05-2007
Agreed. Universal needs Apple more. If they don't put content on iTunes, then people will pirate it instead. They will NOT dump their iPods and such and go to another store, just for Universal, no matter how large a collection they have. Meanwhile, EMI worked with Apple and is now making MORE money off of iTunes Plus.
Interesting that this comes out at the same time as several reports that point to digital sales making a significant impact in sales. If Universal wants to give up those sales and leave money on the table as it were, fine. It won't hurt Apple.
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macsterdam said 2:10PM on 7-05-2007
These two links might contain a hint:
http://www.nytimes.com/2006/11/09/technology/09music.html?ex=1183780800&en=8560c77a30c75f0f&ei=5070
http://createdigitalmusic.com/?p=1719
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Neil Cochrane said 2:14PM on 7-05-2007
They may create their own store for Universal artists. It'd have to be DRM free but they (really they whole music industry right now) would swallow that pill if it meant they could gain a couple more pennies per sale.
If consumers have to look on many different stores to find the song they want chances are there will be rising levels of swash-buckling in the coming months.
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JohnPQ said 2:15PM on 7-05-2007
"Universal needs apple more than apple needs universal."
No they don't. Universal can sign exclusive deals with other stores and perhaps get a piece of the player pie. Apple is the one in trouble here. Without being able to piggyback off other people's content, they are nothing. Do you really think the record companies want Apple to iDictate everything? Maybe this is good news though. It could force Apple to get back into the computer business. ;-)
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Stu said 2:29PM on 7-05-2007
Apple makes their money off of hardware sales. People buy music online when it is more convenient than stealing it is. If Universal drops off Apple won't be effected and Universal will just open itself up to more piracy rather than taking advantage of the market. They won't go DRM free to follow EMI because they're still under the impression that they run the music industry and don't need to change their strategy. iPods outsell everything else by a rediculous amount and everyone using an iPod is hooked up to the iTunes store. They controlled the mobile music industry before they even launched the store to go along with their software. Universal not understanding how the market works won't change things. If the store is integreted into the software that people use to run their players, they are more likely to purchase music online. If not, they are more likely to steal it. Universal launching their own online store (which they should have done in 2001 but now it's too late) and players will do about as much for them as Zune did for Microsoft's music department.
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Rob said 2:31PM on 7-05-2007
God music companies are greedy pigs, do they no know how pathetic cd sales were last year. iTunes is the best thing to happen to music in a long time. Oh well if Universal pulls out everyone will "share" their music and they will lose even more money, then they will come crawling back to Apple.
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Mitch said 2:40PM on 7-05-2007
The big questions are:
What does Universal get if it signs a contract with Apple?
The selling price remains the same - $.99.
Apparently, they can still sell on the iTunes music store without a contract, so what exactly does the contract change?
Do they getter better placement on the site?
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Rboyett said 3:08PM on 7-05-2007
Ok, so 1 out of 3 CDs sold on iTunes comes from Universal.
So the question is, of all of the CDs that Universal sells, what is the percentage that is sold on iTunes?
It wouldn't surprise me if at some point, Jobs pulls all Universal music from iTunes.
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mdc said 3:16PM on 7-05-2007
I haven't followed any links, so I'm not sure if this has been brought up.
I wonder if Universal wants to try strong arm Apple into a deal like the one they have with Microsoft, where they get money for every Zune sold.
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Greg G said 3:44PM on 7-05-2007
Most people get their music from 2 places, iTunes, and, unfortunately, illegal downloads. If Universal goes to some other company, you can be certain their sales will drop.
Not to mention a potential boycott from fanboys.
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Sam G. said 3:58PM on 7-05-2007
Didn't Apple just sell 525,000 new iPods this weekend? This seems like the absolute worst time to even consider going somewhere else.
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Dave said 5:27PM on 7-05-2007
Sometimes, people just have to find out the hard way.. I'm sure Apple will welcome them back 'home' once they've learned their lesson. Friggin' money-hungry record companies.. shee.
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ginzuknives said 5:44PM on 7-05-2007
I agree with the earlier posters. Businesses have to realize that they are no longer in charge of how things are sold to the consumer. It's the consumers who are in the driver's seat. If you make it difficult for consumers, then they'll just find an easier way.
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Rubbinz said 5:47PM on 7-05-2007
Hmmm... Someone's lying like a cheap rug. Apple said on the 3rd "Their music is still on iTunes and their not re-signing is just not true." Now we have Universal saying the exact opposite and confirming the early reports.
Who's telling the truth?
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Alice said 5:50PM on 7-05-2007
If Universal does decide to pull out, i call for a boycott.
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andrew harrison said 7:10PM on 7-05-2007
Universal must have a plan if they are willing to give up 12% or so of their quarterly revenue [see the stats in the original NYT article] so they can sit at the grown-ups' table.
We all know Jobs doesn't like to get fucked over, so I imagine Universal music will stop being promoted as much, and if things get bad, I'm guessing Apple will just pull the catalogue entirely. I'm sure they won't make it easy when Universal come crawling back, cap in hand.
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Bob said 7:28PM on 7-05-2007
Fact: Dinosaurs have brains the size of walnuts.
The more Universal tries to maintain control, the more they will lose business.
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ace said 12:50PM on 7-06-2007
"Apparently, they can still sell on the iTunes music store without a contract, so what exactly does the contract change?"
Uh....someone flunked their economics class. Any one heard of Licencing agreements? You can't sell things without a license or that would be illegal. Uh...Hello....the blackmarket?
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