I wonder who writes the headlines for The Register. They are the best heds on the net.
World's biggest label kneecaps iTunes storeUpdate today
By Andrew Orlowski
Published Monday 2nd July 2007 10:34 GMT
Universal Music Group (UMG) has dealt a serious blow to Apple's music ambitions by refusing to renew its contract with the iTunes Store.
The New York Times reports that the decision not to continue the annual contract was made by UMG executives last week.
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Universal downgrades kneecapping to kick in nuts
By Andrew Orlowski (andrew.orlowski@theregister.co.uk)
Published Tuesday 3rd July 2007 14:02 GMT
Universal Music Group (UMG) has responded to yesterday's report in the New York Times by declaring that it will continue to supply its catalog to Apple's iTunes store. It'll just do so on new terms, far more flexible than it previously enjoyed.
The Times reported that UMG had refused to renew its new annual contract with Apple. Apple therefore faced the prospect of seeing the world's biggest record label withdraw its repertory from the iTunes store. But Business Week reports today that UMG is keeping this nuclear option dry.
It cites anonymous sources who explain that UMG has made an "at will" arrangement, that "enables [UMG] to strike exclusive distribution deals with other digital music providers for individual artists or tracks, though it will continue to sell music through iTunes. Under the new arrangement, for example, Universal could charge another music e-tailer (or Apple, for that matter) a premium to sell Jay-Z's latest single exclusively for a limited time".
With Apple facing competition from ad-supported download services, it's hardly surprising UMG wants to retain flexibility with its pricing. But what UMG wants even more than Apple is to maintain a higher unit price for music, as competition from service providers drives the per-unit cost down, reducing the value of its assets.
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