James Delahunty
4 Oct 2005 12:04
Microsoft had been hoping to offer a music subscription service like those offered by Napster and Real Rhapsody. However, citing unnamed sources, The Wall Street Journal has reported that Microsoft ended licensing talks with the four major labels on Friday. According to the sources, the talks broke down because of what Microsoft considered high royalty rates being sought by the four major labels.
Music subscription "rental" services allow customers to store digital music tracks on Windows Media compatible devices as long as they pay their monthly rental fee. Microsoft hasn't announced the launch of as music rental service yet, but expectation was that the company would do so soon. Now according to the sources, the breakdown in talks will indefinitely postpone a launch of such a service.
According to those close to the situation, the labels were expecting royalty payments of $6 to $8 each per customer, per month. According to people close to the labels, a price like this would be in line with the other subscription services that exist. I guess you could understand Microsoft's frustration, when the monthly fee is set, most of it would be going to the labels whereas the service is up to Microsoft to provide.
Source:
News.com