Why The Zune Blood Money Universal Gets Probably Won't Reach Musicians

from the how-it-all-works dept

We’re still not sure we understand why Microsoft agreed to give a cut of every Zune sold to Universal Music. There’s no real reason to, and it sets a dumb precedent. In fact, Universal Music’s chief, Doug Morris, continues on his self-destructive path of squeezing everybody in the ecosystem for money by saying that he hopes to work out a similar deal with Apple in the future — which seems unlikely to happen. We hope he tries, though, and Apple calls his bluff. It would be interesting to see who needs the other more. However, part of the excitement over the Microsoft deal was that Morris promised that 50% of the money coming in would actually go to the artists — though it was never at all clear how it was determined what musicians would get what. Of course, that leads to all sorts of opportunities for typical entertainment industry funny accounting. Steve Gordon, who literally wrote the (okay, a) book on “the future of the music business,” chimes in with an explanation for why it’s unlikely musicians will see their cut of the deal. It’s not in most musicians contracts to receive money from such licensing deals, and it’s unlikely Universal Music is going to enlighten them about the availability of the money. But, the bigger issue is the same reason why most musicians don’t make any money from CD sales in the first place. The record labels keep all incoming royalties to repay whatever the labels claim was the “cost” of making and promoting their album. Most artists never cover that fee with their royalties, so they never get anything. So, even if Universal actually does earmark the money to musicians, they’ll probably still keep it and put it down to recouped costs.

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Comments on “Why The Zune Blood Money Universal Gets Probably Won't Reach Musicians”

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John Bonaccorso (user link) says:

Where will money go?

Its not just Universal. Can we ever trust someone to tunr over our money. What is their personal interest in doing that. I founded a company that makes sure EVERYONE in the chain ALWAYS get paid on everysale and EVERY RESALE. We believe that this is the way all digital entertainment should be sold-forever.

Randy D says:

Of course they paid

They gave the money to universal to set the precedant thus hoping Apple will also be forced into making the same deal. Microsoft has much more money to throw away than apple so if apple has to pay also, it will impact them much more than Apple. Universal Vs. Apple … who blinks first ? If (big IF) somehow the zune catches on then Universal will win, otherwise it’s all steve saying ninety-nine cents … what part of that don’t you understand ?

Charles Griswold (user link) says:

Re: Re:

I am here to tell everyone the new model for (us) musicians. Record at home, and distribute online. That means no need for Universal. Not to mention I get to own MY music. If you sign with them or the like you are either an idiot or in it for the money.or both.

That’s why I like Magnatune’s business model. The artist keeps the rights to their own music, and gets half of the proceeds from each sale. How cool is that?

(No, I’m not affiliated in any way with Magnatune, I just think that they’re really cool.)

spoon?!?! says:

Roast spoon, anyone?

Lemme play devil’s advocate for a second. What if they really spend these massive loads of money on distribution and advertising?

Then they’re in the wrong freakin’ business, ’cause it’s been a long time since I’ve seen a music ad that’s impacted me! If they don’t spend all this money, then they’re money-hungry despots like every other idiot that doesn’t understand money is nothing but a medium, and welcome to the world of corporate Darwinism, enjoy your stay, and if they do, then that’s just SAD. ^-^ Go be sad for them now ->

spoon??!! says:


And what’s wrolng with pulling in a decent wage? There’s a difference between liking a comfortable lifestyle and being an incoherent money-whore. ‘Sides, anyone who thinks they’re gonna pull loads of cash by signing up with the wrong label isn’t as savvy a businessman as many of the cookie-cutter rappers today.

And are you selling your CDs on 3rd party distribution sites? There are a lot of popular ones that are just distro, no labeling, no DRM, and most of the money still goes to you!

Bri (profile) says:

The sad part is...

…that it wouldn’t even take me more than a couple of weeks, most of that time working on integrating hardware, to ensure that the funds were disbursed proportionately utilizing real-time or near real-time sales data. That type of software, which included the ability to forecast and dynamically adjust its forecasts due to changes in conditions, is something I’ve done before.

Would Universal or the other labels separately or as a consortium be interested in this even if I gave it to them free (which I would, at one time I was a musician and composer as well)? Not on your life! Accurate accounting and financials are the absolute last thing they want to see occur, just as with film and the rest of the entertainment industries.

J Rodriguez says:

How needs the other more???

Apple needs the content. With out agreements from the Recording Lables they can not sell their music. I can see Universal giving Zune a preferential treatment (early release or exclusive music) if Apple refuse to pay.

Limiting their content will hurt them and move busines away to those that have what pepole want to listen.

Drew Barrett (user link) says:

Universal Music Deal with Microsoft and its Zume M

I and my associates are building a digital music, video and movie store with the revolutionary unique selling proposition of empowering all parties involved in the sales transaction, including the consumer.

9thX.com, from The 9thXchance, Inc. an internet start up is introducing a new business model. We are offering 9thX.com member content owners and 9thX.com member consumers to become partners the sale of the music in which both parties have a vested interest.

9thX.com provides an opportunity for purchasers to become resellers legally, there having the incentive to generate more sales for the content owner. We are initially concentrating on ’boutique’ and ‘niche’ content sources and in doing so expect even the artists and writers to benefit from the process.

Check out http://www.9thX.com and the corporate site http://www.9thXchange.com. Join the revolution, membership is free.

Reggie Crandall says:

I found an incredible company that will take digital media to new heights in profit: http://www.9thxchange.com. The 9thXchange marketplace is the newest way to bring together buyers and sellers of digital content. The service dramatically reduces content piracy by offering the seller lifetime royalties — even on exchanges between consumers. Moreover, the service accommodates all technology platforms, file types and creators. I read about The 9thxchange in Crains Detroit recently as well. It’s new and exciting – Reg Crandall

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