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Universal Music Will Try Novel Approach Against iTunes

Using a novel business model, Universal Music, with the help of Sony BMG and possibly others is planning a new service, Total Music, that will seek to wrest control of the online music market from Apple, according to Business Week.

Doug Morris, chief of Universal Music, is aiming to join forces with Sony BMG and possibly Warner Music to develop a new subscription music service. Those three companies would control about 75 percent of the music sold in the U.S. However, this plan has a new wrinkle.

Business Week reported that the new business model involves the hardware manufacturers or cell carriers absorbing the cost of a US$5/month subscription fee. The customer gets an unlimited subscription service for free and the manufacturers sell more players. "Doug is doing the right thing taking on Steve Jobs," said former MCA Records Chairman Irving Azoff.

At one time, Doug Morris were allies. In time, however, Mr. Morris realized that Apple had gained too much control. According to people who were in a meeting with Mr. Morris, he said, "We got rolled like a bunch of puppies."

With the new Total Music plan, music becomes like a utility. After the buyer purchases one of the players, all the music is free. "You know that it's there, and it costs something," said an executive who saw Mr. Morris' presentation. "But you never write a check for it."

The big problem seems to be whether the music player makers can charge enough for the phone to cover the cost of the [free] subscription. "If the object is to wrest control of the market from Steve Jobs," said Gartner analyst Mike McGuire, "this is a credible way to try it."

Meanwhile, Universal continues to do business with Apple on a month by month basis. Sales need a boost, and they can't afford to drop out.

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FakeSteveBallmer said:

member since 11 May 1978 with 43716 posts, Guest, send him a message or view his profile

http://fakesteveballmer.blogspot.com

This thing will destroy iTunes like the Zune has destroyed iPod!

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Intruder said:

member since 07 Jul 2004 with 3149 posts, TMO Mac Specialist, send him a message or view his profile

The first correc thing you've said in 21 posts.

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