Wed Nov 29, 2006 11:05 am

Isn't this tantamount to saying he wants to extort money from a successful company so that he can keep his business from going into the crapper any further than it already has? If the movie companies would stop putting out $100m bombs and start concentrating on quality works, maybe the industry as a whole would stop freaking out. But it may be too late. Their all overpaid and they don't want to remove that teat.

Wed Nov 29, 2006 11:36 am

Let's not forget that Universal has the most impresive artist portfolio, as well as back catalogue (everyone, from Elton John, to 50 cent, to U2, to Jimi Hendrix, to Andrea Bocelli and inbetween is there). Pulling all this from iTMS would put a serious dent in the store catalogue. Having said that, though, SJ will gladly do that, rather than cave in to the extortion demand. For Apple, iTMS is just a smal piece of the iPod Ecosystem puzzle. And in that small piece, Universal Music Group's catalogue is even smaller portion.

Downloads have become not-so-insignificant portion of profits for music labels, big and small. At this point, one out of every 12 dollars of their profit coms from Apple. This number keeps going up. It seems that Microsoft has made a complex calculated bet. They launched their Zune very poorly (deliberately so), with practically no splashy marketing; they made this conspicuous deal with Universal, to whet the labels' appetite and give them ideas. They are hoping to start their Zune busines in the coming months, so they'll have at least some track record by the time Apple and the labels go to re-negotiate their contracts (early '07). Microsoft's bet is that they'll be able to give the lables some leverage in these negotiations. While MS will in no way be part of the talks, it hopes to undermine Apple's hand with the Universal agreement.

The reality is, however, that the Zune initiative is even slower than they hoped. Publicly, they are saying they are exactly where the want to be (duh..???), but privately, they are disappointed. Obviously, this is good for Apple in many ways. Most specifically, in the upcoming negotiations with the labels, they will continue to be in a position to strongarm the labels into submission. The only way this could go bad would be if labels worked together to force Apple into making concessions. In this case, some flexible pricing could be the most SJ would be willing to give, although I'd be surprised if he were to agree to even that. At the expense of only carrying Disney catalogue, SJ will pull all labels from iTMS if they refuse to submit.

Wed Nov 29, 2006 11:44 am

Universal must've made something like $700 from Zune sales by now... Geez, that will really make a big difference...

Wed Nov 29, 2006 12:02 pm

They may be publicly floating the idea to see how it'll go. My guess is that via private "unofficial" communications from Apple he's been told that this is a non starter.

Wed Nov 29, 2006 12:40 pm

In Canada, there is a tax on media used to potentially pirate music like the iPod (and other mp3 players) or Blank DVD's, which range depending the size of media and re-recordability) but apple like (most of the other manufacturers) eats the cost (they dropped their prices to coincide with the levee when it was released). The money is given to the the Canadian recording artist association and is divided up equally among all artists, regardless of what label they are on. This, if feel, is a good system, since not one label, but rather all artists get some recuperation and it's done on a government level, rather than looking like a shady extortion deal from one company to another.

Also, Universal should check themselves. They won't hurt iTunes users as much as if they tried this with another company, since if Universal pulls their music, current owners of a U2 CD won't loose their purchase, now aren't you glad there was no subscription service?

Wed Nov 29, 2006 1:03 pm

Come to think of it, I'd also be interested in striking a deal with Apple Computer that would give me a royalty for each iPod sold. Who do I call?

Wed Nov 29, 2006 1:36 pm

The Canadian example is an interesting one. It is the government that has imposed a tax on all blank media (or equivalent) that can potentially carry copyrighted material. However, even though CDs are often used to pirate software (or eBooks), software publishers (or book publishers) are cut out of the deal. Clearly, music industry is one powerfull (and wealthy) lobby. As fair as the system may be (distributing this 'iPod Tax' equally among recording artists), it is still fundamentally flawed. It taxes an honest consumer in order to cover the damages inflicted on an arbitrary person/entity by criminal elements. In other words, I pay Universal (and others) because someone else stole Universal's music and put in on his iPod.

If this law were to be passed in the United States, I believe some group (EFF perhaps?) could easilly challenge the constitutionality of the law and probably bring it down quickly.

The only fair solution would be what the labels are already doing; vigorously prosecute sharing offenders and educate children about piracy.

Wed Nov 29, 2006 5:00 pm

Here we go again... Canada the "socialist" country. Amazing how very little culture some people have. Anyway... regarding that levy - or iPod tax - I believe it was overturned and is no longer in effect. Apple even gave us back the money (about 15 bucks). I don't think this applies to cds though.

And yes, Doug Morris is a pathetic moron.

Wed Nov 29, 2006 10:27 pm

Can't blame universal for trying since they got positive reinforcement from MSFT caving. If Apple can come up with a must have iTV, it will give them even more power against the studios. Also, it is funny that Jobs and Apple delivers as promised with the iPod and saves the studios from more significant piracy and the studios can't get out of their own way in trying to mess things up again.

Neal

Thu Nov 30, 2006 11:06 am

	Bosco wrote:
	What are you talking aboot Biff? Canada is cool. What other country has a little France stuck right in the middle of it?

It also has a little France stuck on the right hand side, Saint-Pierre and Miquelon. However, these little Frances are French and not Canadian, not even French-Canadian.

I have had nothing but positive experiences when visiting Canada.