Universal Threatens To Take Its Music And Go Home

from the my-tunes dept

While Apple basks in the glow of a successful product launch, the company may have a fresh fire to put out. According to reports, record label Universal has decided not to renew its contract with the company that allows its songs to be sold on iTunes. The label's music may still remain on iTunes after the current contract expires, but Universal will have the right to withdraw it at any time. There's a good chance that Universal is simply posturing here, as it would be hurting itself significantly if it stopped selling on iTunes, which has become the third largest music retailer in the country. That being said, tension between the labels and Apple has been brewing for quite some time, as many labels have been unhappy with Apple's stance on song pricing. Of course, the labels have only themselves to blame for getting into this mess. Their insistence on selling DRM'd tracks is what has allowed Apple to establish and keep its dominance in online music, which in turn gives it the upper hand in these negotiations. If Universal really wanted to stick it to Apple, it wouldn't withdraw its music, but it would find another outlet to sell unprotected MP3s that can play on consumers' iPods. More than anything else, that would force Apple to respond to its demands.
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  1. identicon
    Joe Smith, 2 Jul 2007 @ 11:47pm

    What options??

    UMG is saying they are doing this to keep their options open in case a new system comes along. So say someone decides to launch a new system and charge $2.00 per track and give more to the record companies. How is that new service ever going to break into the market? They won't have the cachet that Apple does and they won't have the customer tie-in that Apple does when someone buys an iPod.

    To even have a chance of making it work UMG and the other record companies would have to pull out of iTunes go to the new more expensive service and hope the customers follow. Chances of the customers following are pretty low. I wonder what Apple would be like to negotiate with if UMG decided to go back to iTunes after the new service fails.

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