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July 9, 2007

itunes_store

Universal translator: “We want more money…”

Posted Jul. 9, ’07, 8:17 AM PT by Dan Moren
Category | iTunes » iTunes Store

UniversalAnd the back-and-forth continues. First, Universal was taking all its toys and going home. Then it looked as though Apple and Universal might engage in a little couples counseling. Now it appears they’ve come to some sort of compromise. Here’s the deal, straight from Universal’s gaping maw:

Universal Music Group has decided not to renew its long-term agreement for Apple’s iTunes service. Universal Music Group will now market its music to iTunes in an ‘at will’ capacity, as it does with its other retail partners.
What does this mean? Well, let’s talk about what it doesn’t mean: Universal is not withdrawing all of its music from iTunes. Even the record label is smart enough to realize that would be the equivalent of breaking its own toes with a sledgehammer. iTunes, as you may recall, is now the third largest music retailer in the US, and it’s poised for even more growth in the future. Universal wants—nay, needs—a presence there. But they’ve been long displeased with Jobs’s insistence on standardized pricing, and are likely wary of his recent push for DRM-free music. Not renewing the long-term contract is the best they can do to register their complaints without losing revenue: it’s leverage.

The most likely outcome is that some Universal music, perhaps from prominent artists, will not be made available on iTunes, perhaps going instead to other online music services. Of course, if the music people want is only available from a non-iPod-compatible service, they’re far less likely to go sign up for that service than they are to acquire that music through, ahem, other means.

So while this announcement may be a sign that Universal is loading its weapons, I’m guessing that they lack the guts to pull the trigger.


1 Comments

Jeff Author Profile Page said:

Lovely pun. ;^)

July 9, 2007 11:39 AM

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