Breaking: Universal Music leaving iTunes Music Store
This is from the Drudge Report.
FLASH: APPLE FACES A REBELLION OVER ITUNES... Universal Music Group, the world's biggest music corporation, notified Apple that it will not renew its annual contract to sell music through iTunes... Developing...
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No link yet, but its red letters on drudge, so it must be true.
Here are their 'artists'
, and I use this term loosly
http://new.umusic.com/artists.aspx
If true, I guess this is the end of the U2 iPop
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Update...
By Yinka Adegoke
NEW YORK (Reuters) - Universal Music Group, the world's largest music company, has declined to sign a long-term deal with Apple Inc.'s iTunes music store, leaving open the possibility for exclusive deals with other services, an industry source said on Sunday.
Universal will continue to sell music and videos of artists including 50 Cent, Mariah Carey and Black Eyed Peas via iTunes on a month-to-month basis, rather than be locked in to a two-year agreement Apple had proposed, the source said.
The music company, owned by French media giant Vivendi SA could now agree to offer significant portions of its repertoire exclusively to new partners, potentially weakening Apple's dominant hold on digital music retail.
Apple currently has more than 70 percent market share of all digital music sold in the United States. It also sells the most popular digital media player, the iPod.
The two sides had extended a previous two-year agreement by 12 months last summer, and that deal expired last month, the source said.
In effect, Apple will now have similar terms to those that Universal already has with the majority of its retail partners.
Some music executives have privately expressed frustration that Apple's dominant position may have hampered growth of the fledgling digital music market by keeping users locked within the Apple system.
Those concerns were further highlighted with the launch of Apple's iPhone last weekend, which they believe may give Apple further control in the mobile phone-based digital music market.
Apple, which only sells digital music via iTunes, has now overtaken Amazon.com to become the third largest retailer of music in the U.S. behind Wal-Mart Stores and Best Buy Co..
Universal, which produces one in three albums sold in the United States, has been leading the push by music companies to demand that new technology and media partners who want to license music share in the proceeds of the new products as well. Last year Universal signed a deal with Microsoft Corp. to take a small share of sales of its digital media player, the Zune.
An Apple spokesperson was not immediately available.
(Additional reporting by Scott Hillis in San Francisco)
------------------------------------- New York Times ----------------------------------------
Universal in Dispute With Apple Over iTunes
By JEFF LEEDS
Steven P. Jobs, the co-founder and chief executive of Apple, is an emerging force in the mobile phone business, thanks to the snaking lines of gadget fans who queued up last week to buy the iPhone. But now he faces a headache in an industry Apple already dominates — digital music.
The Universal Music Group of Vivendi, the world’s biggest music corporation, last week notified Apple that it will not renew its annual contract to sell music through iTunes, according to executives briefed on the issue who asked for anonymity because negotiations between the companies are confidential.
Instead, Universal said that it would market music to Apple at will, a move that could allow Universal to remove its songs from the iTunes service on short notice if the two sides do not agree on pricing or other terms in the future, these executives said.
Universal’s roster of artists includes stars like U2, Akon and Amy Winehouse.
Representatives for Universal and Apple declined to comment. The move, which comes after a standoff in negotiations, is likely to be regarded in the music industry as a boiling over of the long-simmering tensions between Mr. Jobs and the major record labels.
With the shift, Universal appears to be aiming to regain a bit of leverage — although at the risk of provoking a showdown with Mr. Jobs.
In the four years since iTunes popularized the sale of music online, many in the music business have become discouraged by what they consider to be the near-monopoly that Mr. Jobs has held in the digital sector — the one part of the music business that is showing significant growth. In particular, Mr. Jobs’s stance on song pricing and the iPod’s lack of compatibility with music services other than iTunes have become points of contention.
By refusing to enter a long-term deal, Universal may continue to press for more favorable terms from Apple or even explore deals to sell its catalog exclusively through other channels. If Universal were to pull its catalog from iTunes, Mr. Jobs would lose access to record labels that collectively account for one out of every three new releases sold in the United States, according to Nielsen SoundScan data.
But if Apple were to decide not to carry Universal’s recordings, the music company would likely sustain a serious blow: sales of digital music through iTunes and other sources accounted for more than 15 percent of Universal’s worldwide revenue in the first quarter, or more than $200 million. (Vivendi does not break out revenue from Apple alone).
If push came to shove and Universal decided to remove its catalog from iTunes, it might not necessarily instigate a broader insurrection against Apple. The second-biggest corporation, Sony BMG Music Entertainment, recently decided to sign a new one-year contract making its catalog available to iTunes, according to executives briefed on the deal. A spokeswoman for the company, a joint venture of Sony and Bertelsmann, declined to comment.
Some industry observers have cautioned against taking on Mr. Jobs directly. “When your customers are iPod addicts, who are you striking back against?,” said Ken Hertz, an entertainment lawyer who represents artists like Beyoncé and the Black Eyed Peas. “The record companies now have to figure out how to stimulate competition without alienating Steve Jobs, and they need to do that while Steve Jobs still has an incentive to keep them at the table.”
But other music industry executives say the major labels must take a harder line with Apple at some point if they are to recalibrate the relationship. In particular, they say, it is unfair for Mr. Jobs to exert tight control over prices and other terms while profiting from the iPod. Mr. Jobs, in February, noted that less than 3 percent of the music on the average iPod was bought from iTunes, leading music executives to speculate that the devices in many instances are used to store pirated songs. (Of course, users can also fill their players with songs copied from their own CD collections.)
Apple has now sold more than 100 million iPods, and the device’s ties to iTunes have helped make Apple the leading seller of digital music by a wide margin. The iTunes service accounts for 76 percent of digital music sales, and the contract talks come as it is on the rise — Apple recently surpassed Amazon.com to become the third-biggest seller of music over all, behind Wal-Mart and Best Buy, according to data from the market research firm NPD.
All of that has transformed Apple into a prominent gatekeeper, wielding influence as a tastemaker by highlighting selected artists on iTunes storefront, and as an architect of the underlying business dynamics.
Apple has stuck to a pricing system that charges a flat 99 cents for a song since iTunes started four years ago (except for the recent introduction of songs without copy protection, which carry a higher price). Mr. Jobs has long argued that a uniform system and low prices will invite new consumers and reduce piracy.
But some music executives have been chafing at the flat rate that Apple has insisted upon in its contracts with the big record labels, and they have been pressing publicly or privately for the right to charge Apple more for popular songs to capitalize on demand or, in the event of special promotions, to charge less. Edgar Bronfman Jr., the chairman of Warner Music Group, reinforced that idea at a recent investor conference, saying “we believe that not every song, not every artist, not every album, is created equal.”
In the backdrop of the pricing dispute is an investigation by European regulators who are studying the roles of the music companies and Apple in setting prices in certain international markets.
At the same time, Mr. Jobs has refused the industry’s calls for Apple to license its proprietary copy restriction software to other manufacturers. Music executives want the software to be shared so that services other than iTunes can sell music that can be played on the iPod, and so that other devices can play songs bought from iTunes.
Mr. Jobs has argued that sharing the software with other companies would increase the likelihood that its protections would be cracked by hackers, among other problems. Instead, he asked the music companies to drop their insistence on copy protection altogether. So far, only one of the four music companies, EMI, has made a deal to sell unrestricted music through iTunes.
FLASH: APPLE FACES A REBELLION OVER ITUNES... Universal Music Group, the world's biggest music corporation, notified Apple that it will not renew its annual contract to sell music through iTunes... Developing...
---
No link yet, but its red letters on drudge, so it must be true.
Here are their 'artists'
, and I use this term looslyhttp://new.umusic.com/artists.aspx
If true, I guess this is the end of the U2 iPop
-------
Update...
By Yinka Adegoke
NEW YORK (Reuters) - Universal Music Group, the world's largest music company, has declined to sign a long-term deal with Apple Inc.'s iTunes music store, leaving open the possibility for exclusive deals with other services, an industry source said on Sunday.
Universal will continue to sell music and videos of artists including 50 Cent, Mariah Carey and Black Eyed Peas via iTunes on a month-to-month basis, rather than be locked in to a two-year agreement Apple had proposed, the source said.
The music company, owned by French media giant Vivendi SA could now agree to offer significant portions of its repertoire exclusively to new partners, potentially weakening Apple's dominant hold on digital music retail.
Apple currently has more than 70 percent market share of all digital music sold in the United States. It also sells the most popular digital media player, the iPod.
The two sides had extended a previous two-year agreement by 12 months last summer, and that deal expired last month, the source said.
In effect, Apple will now have similar terms to those that Universal already has with the majority of its retail partners.
Some music executives have privately expressed frustration that Apple's dominant position may have hampered growth of the fledgling digital music market by keeping users locked within the Apple system.
Those concerns were further highlighted with the launch of Apple's iPhone last weekend, which they believe may give Apple further control in the mobile phone-based digital music market.
Apple, which only sells digital music via iTunes, has now overtaken Amazon.com to become the third largest retailer of music in the U.S. behind Wal-Mart Stores and Best Buy Co..
Universal, which produces one in three albums sold in the United States, has been leading the push by music companies to demand that new technology and media partners who want to license music share in the proceeds of the new products as well. Last year Universal signed a deal with Microsoft Corp. to take a small share of sales of its digital media player, the Zune.
An Apple spokesperson was not immediately available.
(Additional reporting by Scott Hillis in San Francisco)
------------------------------------- New York Times ----------------------------------------
Universal in Dispute With Apple Over iTunes
By JEFF LEEDS
Steven P. Jobs, the co-founder and chief executive of Apple, is an emerging force in the mobile phone business, thanks to the snaking lines of gadget fans who queued up last week to buy the iPhone. But now he faces a headache in an industry Apple already dominates — digital music.
The Universal Music Group of Vivendi, the world’s biggest music corporation, last week notified Apple that it will not renew its annual contract to sell music through iTunes, according to executives briefed on the issue who asked for anonymity because negotiations between the companies are confidential.
Instead, Universal said that it would market music to Apple at will, a move that could allow Universal to remove its songs from the iTunes service on short notice if the two sides do not agree on pricing or other terms in the future, these executives said.
Universal’s roster of artists includes stars like U2, Akon and Amy Winehouse.
Representatives for Universal and Apple declined to comment. The move, which comes after a standoff in negotiations, is likely to be regarded in the music industry as a boiling over of the long-simmering tensions between Mr. Jobs and the major record labels.
With the shift, Universal appears to be aiming to regain a bit of leverage — although at the risk of provoking a showdown with Mr. Jobs.
In the four years since iTunes popularized the sale of music online, many in the music business have become discouraged by what they consider to be the near-monopoly that Mr. Jobs has held in the digital sector — the one part of the music business that is showing significant growth. In particular, Mr. Jobs’s stance on song pricing and the iPod’s lack of compatibility with music services other than iTunes have become points of contention.
By refusing to enter a long-term deal, Universal may continue to press for more favorable terms from Apple or even explore deals to sell its catalog exclusively through other channels. If Universal were to pull its catalog from iTunes, Mr. Jobs would lose access to record labels that collectively account for one out of every three new releases sold in the United States, according to Nielsen SoundScan data.
But if Apple were to decide not to carry Universal’s recordings, the music company would likely sustain a serious blow: sales of digital music through iTunes and other sources accounted for more than 15 percent of Universal’s worldwide revenue in the first quarter, or more than $200 million. (Vivendi does not break out revenue from Apple alone).
If push came to shove and Universal decided to remove its catalog from iTunes, it might not necessarily instigate a broader insurrection against Apple. The second-biggest corporation, Sony BMG Music Entertainment, recently decided to sign a new one-year contract making its catalog available to iTunes, according to executives briefed on the deal. A spokeswoman for the company, a joint venture of Sony and Bertelsmann, declined to comment.
Some industry observers have cautioned against taking on Mr. Jobs directly. “When your customers are iPod addicts, who are you striking back against?,” said Ken Hertz, an entertainment lawyer who represents artists like Beyoncé and the Black Eyed Peas. “The record companies now have to figure out how to stimulate competition without alienating Steve Jobs, and they need to do that while Steve Jobs still has an incentive to keep them at the table.”
But other music industry executives say the major labels must take a harder line with Apple at some point if they are to recalibrate the relationship. In particular, they say, it is unfair for Mr. Jobs to exert tight control over prices and other terms while profiting from the iPod. Mr. Jobs, in February, noted that less than 3 percent of the music on the average iPod was bought from iTunes, leading music executives to speculate that the devices in many instances are used to store pirated songs. (Of course, users can also fill their players with songs copied from their own CD collections.)
Apple has now sold more than 100 million iPods, and the device’s ties to iTunes have helped make Apple the leading seller of digital music by a wide margin. The iTunes service accounts for 76 percent of digital music sales, and the contract talks come as it is on the rise — Apple recently surpassed Amazon.com to become the third-biggest seller of music over all, behind Wal-Mart and Best Buy, according to data from the market research firm NPD.
All of that has transformed Apple into a prominent gatekeeper, wielding influence as a tastemaker by highlighting selected artists on iTunes storefront, and as an architect of the underlying business dynamics.
Apple has stuck to a pricing system that charges a flat 99 cents for a song since iTunes started four years ago (except for the recent introduction of songs without copy protection, which carry a higher price). Mr. Jobs has long argued that a uniform system and low prices will invite new consumers and reduce piracy.
But some music executives have been chafing at the flat rate that Apple has insisted upon in its contracts with the big record labels, and they have been pressing publicly or privately for the right to charge Apple more for popular songs to capitalize on demand or, in the event of special promotions, to charge less. Edgar Bronfman Jr., the chairman of Warner Music Group, reinforced that idea at a recent investor conference, saying “we believe that not every song, not every artist, not every album, is created equal.”
In the backdrop of the pricing dispute is an investigation by European regulators who are studying the roles of the music companies and Apple in setting prices in certain international markets.
At the same time, Mr. Jobs has refused the industry’s calls for Apple to license its proprietary copy restriction software to other manufacturers. Music executives want the software to be shared so that services other than iTunes can sell music that can be played on the iPod, and so that other devices can play songs bought from iTunes.
Mr. Jobs has argued that sharing the software with other companies would increase the likelihood that its protections would be cracked by hackers, among other problems. Instead, he asked the music companies to drop their insistence on copy protection altogether. So far, only one of the four music companies, EMI, has made a deal to sell unrestricted music through iTunes.
Comments
Don't recall the exact details, so I could be off.
I seem to remember Apple or Jobs made a run (or was rumored to) at one time to buy a goodly portion of the monolith.
I'm sure they would net more profit at any rate.
The point is the entire music industry could be poised for a change that would eviscerate giants like Vivendi that exist today.
Like I've seen in other humorous threads, it's not a good thing to anger the Steve.
"Highlighting ongoing tension between the music industry and Apple Inc., Vivendi SA's Universal Music Group is set to notify the Cupertino, Calif. company that it is not renewing a long term contract to sell digital music downloads through the increasingly powerful iTunes Store, according to people familiar with the situation.
The move does not mean, however, that Universal will remove its vast catalog -- including Eminem, 50 Cent and Sting -- from iTunes in the foreseeable future. Instead, Universal, which is the world's largest music company by market share, expects to go to a short-term sales agreement."
a little jockeying for time it seems...
The move does not mean, however, that Universal will remove its vast catalog -- including Eminem, 50 Cent and Sting -- from iTunes in the foreseeable future. Instead, Universal, which is the world's largest music company by market share, expects to go to a short-term sales agreement."
This really changes the gravity of this story. Almost worthless as a news item even.
Universal Music Group is set to notify the Cupertino, Calif. company that it is not renewing a long term contract to sell digital music downloads through the increasingly powerful iTunes Store, according to people familiar with the situation. The move does not mean, however, that Universal will remove its vast catalog from iTunes in the foreseeable future. Instead, Universal expects to go to a short-term sales agreement.
Though it is unlikely to have sweeping effects immediately, the change could give Universal more flexibility in its dealings with competitors to iTunes -- for instance enabling the company to offer other digital download stores parts of its catalog exclusively. Apple has gained an outsize influence in music sales. Its power has made record label executives increasingly uneasy, as it has generally refused to comply with labels' desire for flexibility on matters such as pricing flexibility.
just out from Wall Street Journal:
"Highlighting ongoing tension between the music industry and Apple Inc., Vivendi SA's Universal Music Group is set to notify the Cupertino, Calif. company that it is not renewing a long term contract to sell digital music downloads through the increasingly powerful iTunes Store, according to people familiar with the situation.
The move does not mean, however, that Universal will remove its vast catalog -- including Eminem, 50 Cent and Sting -- from iTunes in the foreseeable future. Instead, Universal, which is the world's largest music company by market share, expects to go to a short-term sales agreement."
a little jockeying for time it seems...
Right. They want month-to-month terms, not a 2 year deal, like before. They are the biggest music publisher out there, so this will no doubt affect the public perception that 'everyone is fleeing iTunes'...
Just a note, but when will Apple Inc. Shock the world and finally buy them selves a movie or music company where are we 9B in cash. Yes I am a stock holder so I am a "we". At some point they just have to spend this money!!
Try 12.5B billion last quarter (which will most likely jump to 14 billion when the next quarterly report comes out in a few weeks).
This really changes the gravity of this story. Almost worthless as a news item even.
That's what I was thinking. Just because itunes doesn't have exclusivity doesn't mean that Universal music won't be on itunes unless someone else gets exclusivity. Since Universal are so big, it doesn't make sense to have an exclusive deal for them when they'd make more money allowing multiple music stores the rights to sell the music.
just out from Wall Street Journal:
"Highlighting ongoing tension between the music industry and Apple Inc., Vivendi SA's Universal Music Group is set to notify the Cupertino, Calif. company that it is not renewing a long term contract to sell digital music downloads through the increasingly powerful iTunes Store, according to people familiar with the situation.
The move does not mean, however, that Universal will remove its vast catalog -- including Eminem, 50 Cent and Sting -- from iTunes in the foreseeable future. Instead, Universal, which is the world's largest music company by market share, expects to go to a short-term sales agreement."
a little jockeying for time it seems...
Exactly. They're not going to pull it. Especially for the reason that iTunes accounts for $200 million of their overall revenue, according to the NYT article.