Check out the article:
Universal
In effect, Universal did not renew a multi year agreement. They instead are opting to renew Apple's license for month to month, and the article says they could do exclusive deals with other online music vendors. They are also the music company that demands a cut of the hardware revenue. That is, they would want a cut of each iPod sold, regardless of whether the iPod will have music by Universal or not. They do that with the Zune.
I think this is totally outrageous! But business is business, and I think this puts Apple in a very difficult position to stay competetive. It will be interesting to see what Jobs can do to get out of this one. The article claims Universal publishes one in three albums these days. What do you guys think?
2 comments:
I think Universal is playing chicken. The move may hurt Apple, but it also hurts Universal. Say they go head over heals with the Zune and nobody or hardly anybody buys. Then Universal's clients are not going to be all that happy. They may decide to jump ship to another label when their contract expires. They may not like playing with Apple but Apple is bringing in revenue. At this point Apple could almost become their own record label. iTunes Records. They could give the artists bigger cuts than the big labels yet still have the large exposure. Two can play chicken.
I actually love the idea of iTunes records! I really think Apple would do a great job of helping artists out. I think that it would also be quite an expansion at Apple to do someting like that! I mean, as a music company that deals directly with artists, it really is a different ballgame than the pure technology sector that Apple is used to. I wonder how many big name artists would go to iTunes Records!
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