James Delahunty
2 Jul 2007 18:59
Universal Music Group (UMG) is reportedly seeking to abandon year long+ agreements with Apple Inc.'s iTunes multimedia download store. Instead, the world's largest record company is seeking to make short-term, month-by-month licensing agreements with Apple. According to a source seeking to remain anonymous, the arrangement would allow Universal to offer exclusive content deals to rivals of iTunes.
Wal-Mart, Best Buy Co. and Yahoo Inc. currently have similar short-term agreements with Universal for their online offerings. The previous agreement with Universal expired at the start of June, and according to Apple spokesman Tom Neumayr, both companies are still negotiating.
"Their music is still on iTunes, and their not re-signing is just not true," Neumayr said, declining to elaborate. When Apple first signed deals with the major record companies a few years ago, the record industry was failing to provide alternatives to piracy when interest in digital music files was booming.
Apple CEO Steve Jobs had a plan for a "one-price-for-all" music download store that could be tied with the company's iPod. Apple has since grown to be the No. 3 music retailer in the United States. The company claims to have revolutionized music online and as a result, has always had considerable leverage in its dealings with the record industry, and many executives within the record companies are tired of not being in power.
"There's some feeling among some music labels and some executives that Apple, because it's so dominant with iTunes, has gained a disproportionate power in the equation," said Susan Kevorkian, an analyst with market researcher IDC. "This looks like tactics to enable Universal to regain some control over the situation, at least as they perceive it."
Source:
Yahoo (AP)