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Update: Universal wants out of long term contract with iTunes

5 July 2007 14:53 by Andre "DVDBack23" Yoskowitz | 5 comments

Although Apple denied the rumors, Universal confirmed that they were indeed looking to end its long term contract with iTunes and instead were looking for an "at will" contract.

Although "at will" contracts are usually reserved for minor distributors, industry insiders say Universal's move is an attempt to get the upper hand on Apple in setting terms and prices.

Universal has been very aggressive over the last few years in regard to its digital distribution strategy, even going as far as to sign a deal with Microsoft to get a cut of all sales of the Zune.

"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," said a prepared Universal statement.

If worse comes to worse in this situation, Universal's music could be completely pulled from iTunes or all new music could be withheld. That would not come without a price however. 15 percent of all the music sold on iTunes is Universal's and so pulling the music would be a large revenue disruption for both companies.

Rumors, although not confirmed, have been floating around that the recent Universal move was brought forward in part because of the label's anger over iTunes Plus. Universal is one of, if not the, most pro-DRM labels in the world.

Source:
BetaNews

Permalink to this article | Topic: Online music services

NBC TV shows to be available on Amazon's Unbox (4 September 2007)

Wal-Mart hopes to gain market share by losing DRM (21 August 2007)

iTunes rival launched by Viacom and RealNetworks (21 August 2007)

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WierdName (Senior Member) 5 July 2007 17:05
Plain and simple, they want money. I guess somehow they don't realize that DRM free music will actually help make them profits. [ + quote]
borhan9 (AfterDawn Addict) 5 July 2007 18:03
This sounds like its going to be a long winded battle. [ + quote]
Riotard (Newbie) 6 July 2007 3:23
Go Universal! Defeat the tyrant that is itune! Down with them and their money grabbing ways! About time soem fo the big companys started gettign agressive with apple, and their near monopoly of digital music distribution, because until now, apple have pushed over and controlled all the big comapnies. I SAY LET UNIVERSAL NOT SELL ON ITUNES! LET THEM GO TO DIFFERENT RETAILERS, and start breakign this stupid hold apple have on this market. They only have this hold because they stole from creative! [ + quote]
webe123 (Inactive) 6 July 2007 11:48
Originally posted by Riotard: Go Universal! Defeat the tyrant that is itune! Down with them and their money grabbing ways! About time soem fo the big companys started gettign agressive with apple, and their near monopoly of digital music distribution, because until now, apple have pushed over and controlled all the big comapnies. I SAY LET UNIVERSAL NOT SELL ON ITUNES! LET THEM GO TO DIFFERENT RETAILERS, and start breakign this stupid hold apple have on this market. They only have this hold because they stole from creative! @Riotard....Are you SERIOUS? You sound like a RETARD! First off, isn't it the music industry, that is the "pot" calling the "kettle" black? I think so! What about a music industry that Universal is a part of...that SUES IT'S OWN CUSTOMERS? What about them suing grandmothers and 14 year olds? Not to mention college students. You want them to put up a fight? I say.... LET ITUNES TELL UNIVERSAL TO FUCK OFF! They can either stick to their original agreement and sell songs the way they have or try to be greedy and LOSE a source of income they have always had. But if universal and the rest of the recording companies are trying to be like the moinoply they once were....it simply will not work...and I am grateful for that! I do not know if you like being a slave to the music industry..apparntly you think that it is somehow unfiar for the music industry and apple to agree to 99 cents a song....but I think those prices are highway robbery! And you want the music industry to be a in a position where they would be able to charge MORE?! You have lost your mind! I will say this slowly so even you can understand it...We need lower prices on songs...not higher prices like what the industry would charge if they got their way! So they can go jump in alake if they do not like the current system! They should have never agreed to it in the first place if they did not like it...too late now! [ + quote]
Steve83 (Member) 6 July 2007 14:57
The enemy of my enemy... ...is still my enemy. They can both phuqueahf. When they get the price-per-track back in line with QUALITY (of the songs), and their own COST, including a REASONABLE profit margin, THEN I'll start thinking about buying music again. Until then, I'll just keep doing it the legal way: recording off the radio or anything else I'm legally entitled to. :D [ + quote]