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Universal looks to share iPod profits

updated 09:00 am EST, Wed November 29, 2006

Universal looks to iPod

The enormous success of Apple's iPod is now the eye of much of the industry, including those who hope to gain a share of the profits produced by the popular media player. Music industry heavyweight Universal said it would try to negotiate a share of the profits during the next round of negotiations in early 2007, according to Reuters. Universal Music Group Chief Executive Doug Morris said on Tuesday he may try to secure an iPod royalty fee with Apple Computer Inc. in the next round of negotiations in early 2007. Universal, the world's largest music company, already receives a fee for every Zune player sold and was the first major record label to strike an agreement with Microsoft. "It would be a nice idea. We have a negotiation coming up not too far. I don't see why we wouldn't do that... but maybe not in the same way," he told the Reuters Media Summit, when asked if Universal would negotiate a royalty fee for the iPod that would be similar to Microsoft's Zune.

by MacNN Staff

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bobolicious
Fresh-Faced Recruit

Joined: Aug 2002

0

11/29, 09:13am | report spam | close Reply |
Another reason to buy CDs

...and keep the digital wolves at bay - too much big brother for me... I hope Apple just says no...

kerryb
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Joined: Aug 2001

0

11/29, 09:22am | report spam | close Reply |
Microsoft's secret weapon

Maybe M$ gave a "Zune dollar" away to undermine Apple's contracts with the tyrants of the music industry. It's hard to say no to one greedy child that gets a big piece of pie from someone else. Hopefully Apple will say get lost and find a better way of making a dollar, for example creating something that someone wants.

legacyb4
Mac Elite

Joined: May 2001

0

11/29, 09:27am | report spam | close Reply |
Unbelievable greed...

but what's new? Imagine if the gas companies tried to apply a "fee" for every car sold on the market?

t6hawk
Mac Enthusiast

Joined: Jan 2001

0

11/29, 09:33am | report spam | close Reply |
...

The labels are pigs. Incredibly greedy ones at that. It's not like they are hurting for money. h*** they should be happy they are selling so many tracks online.

jstephe
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Joined: Feb 2006

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11/29, 09:35am | report spam | close Reply |
I would neotiat

Tell them that they will get $1 for every iPOD and nothing on the sale of music on iTunes seeing as no one buys music for there iPODs anyway, they should not have a problem with that ;-)

jstephe
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Joined: Feb 2006

0

11/29, 09:37am | report spam | close Reply |
sorry thats negotiate

negotiate

boomer0127
Fresh-Faced Recruit

Joined: Jan 2004

0

11/29, 09:45am | report spam | close Reply |
s**** them!

Apple should tell them status quo - and if they threaten to pull out, let them! Apple should send out an email to the subscribing masses explaining which of their favorite artists are no longer available on iTunes then give alternative acts that sound similar from other labels. And when you search for those bands n the iTMS, have "similar" bands from other labels appear under an apology for the greedy label in question.

How greedy can these a$$holes get? INSANE!

ethical_paul
Fresh-Faced Recruit

Joined: Mar 2002

0

11/29, 09:48am | report spam | close Reply |
Hah ha, no way

I predict steve would take down the ITMS before he would let those idiots have a share of his iPod profits, and he should.

devospice
Fresh-Faced Recruit

Joined: Aug 2000

0

11/29, 09:54am | report spam | close Reply |
This should be amusing.

I would love to be a fly on the wall during that negotiation. No way Steve is going to go for that.

climacs
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Joined: Sep 2001

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11/29, 09:59am | report spam | close Reply |
you knew that was coming

when you heard MS was paying them a buck for each of the Zunes they sell (that will amount to, what, 28 bucks?)

If Universal wanted to share in the profitability of iPods, they should have bought AAPL stock. It could have been had for under $60 a share just a couple months ago!

I feel SO justified in pirating music after reading this.

climacs
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Joined: Sep 2001

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11/29, 10:03am | report spam | close Reply |
no way is it going to

happen. Jobs can't just tell them to go f*** themselves - but it simply isn't going to happen. First Universal, then all the others will demand a cut. Then after each of them gets a buck for each iPod, it won't be enough for them and they'll demand 2 bucks, 3, 4, 5, and pretty soon the iPod costs $50 more so that these greedy scumbags can get their cut.

Music industry execs are no better than mafiosi. "Nice MP3 player you've got there... it'd be a shame if something were to happen to it! For just a dollar for each player sold, we can ensure you still have music to sell for it..."

jfelbab
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Joined: Jan 2004

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11/29, 10:16am | report spam | close Reply |
Wishful thinking

Universal and the rest would like this free money but unlike a desperate MS and their Zune, Apple with the iPod and iTunes has the market share. If the labels want any revenue they pretty much have to sell their music to Steve. Steve gets to set the terms and it would not take long for these greedy record companies to see the reality if their tunes were not available on iTunes. Hold their feet to the fire, Steve.

Mr. Strat
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Joined: Jan 2002

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11/29, 10:30am | report spam | close Reply |
stick it

I hope Apple tells them to stick it up their a**...and informs them that the iPod is not a Zune.

PookJP
Mac Enthusiast

Joined: Jan 2001

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11/29, 10:30am | report spam | close Reply |
My Goodness

If only the major labels were as talented at making a viable business model as they are at devising new ways to be pathetic greedhounds.

vasic
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Joined: May 2005

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11/29, 10:45am | report spam | close Reply |
Don't dismiss labels

Especially Universal Music Group. People often forget that practically ALL music they listen to is from the big five. From 50 cent, to Elton John, to Jimi Hendrix, to Andrea Bocelli; these are all Universal artists; every single big name is on one of the five.

While this fact gives the labels some leverage, the fact that their future is in digital delivery takes all that leverage from them and gives it to Steve Jobs. For Universal, Apple provided about 8% of their profits (and it keeps climbing every month). For Apple, Universal's share on iTMS provides negligible profits (compared to their hardware business). It is very clear here who has better hand in these negotiations.

The way it has started its existence, it is clear that Zune will not be a factor in these negotiations (as much as MS would love it to be otherwise).

pintwin1
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Joined: Nov 2006

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11/29, 10:45am | report spam | close Reply |
Universal needs the money

As I recall, this is the same Universal that spent over $40 Million dollars to settle accusations that they "...conspired to illegally fix and control the pricing of Music Products sold to consumers through...Distributors� adoption and utilization of Minimum Advertised Price (MAP) programs in violation of the Sherman Act, state antitrust and unfair competition and/or consumer protection laws" from 1995 through 2000 (See: http://www.musiccdsettlement.com/english/default.htm)

The casual exchange of media has gone on for as long as media has been around, and I believe Apple has found the proper balance of casual exchange while protecting the property of the media companies: Rather than forcing upon the consumer "copy-proof" goods or high-profit subscription plans, the media firms' might want to consider providing good, entertaining content at a reasonable price. BTW: I strongly suspect that if the mother of a Univeral bigwig wants a copy of a popular song or movie, the bigwig isn't going to tell her to buy it at retail ;-) Thanks for reading!

Gepard
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11/29, 10:48am | report spam | close Reply |
iPod is not just MP3s

Let's put this way.

iPod is not just music player. It can play audio books, video files, audio and video podcasts. It can play games now, keep your address book and more. It can boot your Mac from and finally, it is just an external hard drive for your PC or Mac where you can keep files that have nothing to do with the greedy Universal guys.

Actually, the problem is not Universal, it's Microsoft who decided to pay a fee to the label just to have them signed up.

macbarry
Junior Member

Joined: Aug 2002

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11/29, 10:53am | report spam | close Reply |
leverage

M$ basically had zero leverage with Universal in their quest to obtain music for thier Zune online service - they had to deal in order to be even slightly viable in the online music market and Universal knew this.

OTOH, Apple is dominant in online music sales and is essentially creating unprecidented profits for the music companies. If Universal demands Apple pay them $1 for every ipod they sell and Apple refuses - what then for Universal? Pull out of iTunes and immediately lose profits? There might be leverage for Universal if M$ (or another competitor) was killing Apple in sales of players and music but that ain't happening yet. So, Universal has no leverage. This idea is clearly DOA and just wishful thinking and posturing by Universal after their sucessful and easy rape of M$ (which couldn't have happened to a better victim).

At this point Apple holds all the cards in online music. Even the Beatles are coming around. Give it up Universal. You guys are pathetic.

Peter753
Forum Regular

Joined: Sep 2001

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11/29, 11:07am | report spam | close Reply |
What if...

a dollar up front with your iPod got you access to buy any Universal movie title on the ITMS?

cmoney
Mac Enthusiast

Joined: Sep 2000

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11/29, 11:07am | report spam | close Reply |
legalize copying music?

so if we pay a royalty fee for buying an ipod, does that mean we can then copy universal music legally? what rights do we get for paying the royalty?

Foe Hammer
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Joined: Feb 2005

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11/29, 11:20am | report spam | close Reply |
Dig, Doug

"It would be a nice idea. We have a negotiation coming up not too far. I don't see why we wouldn't do that... but maybe not in the same way," he told the Reuters Media Summit, when asked if Universal would negotiate a royalty fee for the iPod that would be similar to Microsoft's Zune.

--Ol' Douggie doesn't sound as demanding about it as the title of the article implies, does he?

Rezzz
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11/29, 11:20am | report spam | close Reply |
Arsehole!

"It would be a nice idea. [...] I don't see why we wouldn't do that."

Maybe it's because you didn't take the risk to make an MP3 player? You didn't pour in the R&D? You didn't design the device? You didn't hire all the genius employees and pay their salaries? You didn't negotiate with 3rd party vendors? You didn't market the device? You didn't spend millions in branding? You didn't even have the slightest concept? Maybe that's why Apple shouldn't do that? Just maybe? And, if you had done it, would you be willing to share the profits like you're asking Apple to do? No? Why not?

"..but maybe not in the same way"

What? A dollar won't due? I suppose you'd like a percentage just like they taught you in economics all those years ago? How many statements can I end with question marks? Can you even answer that?

lsinger9404
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Joined: Nov 2003

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11/29, 11:31am | report spam | close Reply |
share of profits??

They want a share of ipod profits? tell 'em to buy some apple stock

humblec
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Joined: Nov 2006

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11/29, 11:46am | report spam | close Reply |
sounds fair

Apple should get a royalty for every Universal product sold, even if not sold through iTMS. I think the ipod stimulates more sales than Apple gets credit for. So it sounds like a good idea to renegotiate, just not the way Universal hopes.

jogdish
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11/29, 11:46am | report spam | close Reply |
Stealing Music

I actually gave up stealing music when the iTMS came along because I could by the songs I liked without without having to spend $15 for the rest of the songs that I did not like. If Universal does this, I promise to start stealing music again.

horvatic
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Joined: Apr 2002

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11/29, 11:49am | report spam | close Reply |
We have no rights

We have no rights, were pirates according to Mr. Morris. This scumbag isn't going to get a penny of the iPod if Steve Jobs has anything to do with it. Sure he can pull his music out and see what that gets him. How many sales will he get from the Zune and there music store versus iTunes? No comparison I'm sure. Before we were pirates when we copied CD's. Now were pirates even when we pay for the downloaded files. This guy is worse than the moffia. I hope it gets him no where.

climacs
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Joined: Sep 2001

0

11/29, 11:51am | report spam | close Reply |
re: stealing music

jogdish, if you own an iPod you are already a music thief. That's what these same Universal Music suits said not very long ago.

So you are already guilty. Might as well pirate away, matey!

climacs
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Joined: Sep 2001

0

11/29, 11:59am | report spam | close Reply |
re: Zune Marketplace

horvatic said:

How many sales will he get from the Zune and there music store versus iTunes? No comparison I'm sure.

As I noted in another comments thread, have you seen the pricing horror show that is Zune Marketplace?

You buy points in increments of $5. Every $5 buys 400 points.

One tune costs 79 points. I'm not sure what album pricing is. Let's say it's based on iTMS and it's 10 times the single tune pricing, or 790 points.

So let's say I spent $5 to get 400 points, and then I bought 4 songs, so I have 84 points left over. I want to buy the new U2 album.

So I need 790 points. I have 84 points. So I need 706 points. That's um... 706 divided by 4... ummm do I need $10, I think?

Or, I could just go to iTunes Music Store and spend just $0.99 if I want to, or $9.99 for an album. Gee, I can understand that without a f****** calculator like I need with Zune Marketplace.

What kind of drugs are these Microsoft dorks on?

zbug
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Joined: Sep 2006

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11/29, 12:13pm | report spam | close Reply |
omg no...

Dear all,

we should see the big picture here.. this might be the only way M$ can take over this business, the only reason M$ offered them 1$ per zune is to open their eyes on Ipod. if steve said yes,, thats it apple will have in increase 1$ to give them, then can add it to the ipods cost and forget about it. but wait now the others want the same.. = 1-2-3-4-5-$ that is not the problem here really the problems is that M$ knows that apple is not even close to the way M$ thinks ( just throw money around) so apple would reject something like this. then guess what ? they will all go running to M$ for the 1 buck they are shelling out.. thats how zune would rule the MP3 world ( i just hope that never happens ) but i think thats M$'s plan from the start. people here or elsewhere things that M$ did that so they can get a few tracks.. but not.. they did that to bring apple down. i just hope that things will work out how the apple way... or else back to Pirating :)

hope i made sense.. let me think what u guys and gals think :)

83caddy16v
Forum Regular

Joined: Sep 2000

0

11/29, 12:15pm | report spam | close Reply |
RE: what if

I think that might be a point worth exploring, what does Universal bring to the table beyond music?

if $1 iPod stipen gets a vast movie & TV show catalog available on iTunes then it may be in Apples' interest to negotiate to grow and become/maintain its leadership position with music & video.

suhail
Senior User

Joined: Nov 1999

0

11/29, 01:33pm | report spam | close Reply |
does not make sense to me

I do not use my iPod for music. I use it for audiobooks, lectures, and podcasts. I don't see why the music industry should get a share of my purchase.

mike3k
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Joined: May 1999

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11/29, 01:38pm | report spam | close Reply |
f*** Universal

Yet another reason not to buy any music from Universal. If this went through I'd never buy another iPod because I don't want even $1 of my money going to Univeral. They can just go f*** themselves.

csi95
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Joined: Apr 2005

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11/29, 02:06pm | report spam | close Reply |
In a word: No!

This kind of stuff is simply ridiculous. Universal sells the music (movie, whatever) to the consumer. That's how they get their profit. Whether the consumer gets a plastic disc that they pop into a CD player or a digital file that they download to an iPod makes no difference what so ever.

You can bet that Sony isn't paying them for every walkman they ever sold.

You can bet pioneer isn't paying them for every cd player they've sold.

Apple doesn't owe them a dime.

ff11
Fresh-Faced Recruit

Joined: Apr 2004

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11/29, 07:41pm | report spam | close Reply |
Hmmm...

Universal already shares in the profit generated by it's songs sold through Apple's iTunes store. If it wants to share in the profit from hardware and software it had nothing to do with designing, developing, marketing, and selling, it's only fair that they give Apple a share of all of their non-iTunes related profits in exchange?

maczep
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11/29, 09:50pm | report spam | close Reply |
Think Vivendi Universal

I agreed this is a stupid idea. Earlier threads talks about writing to or boycotting Universal Music Group. That may work, but like someone said here again. They own a lot.

Now. I think they might list if we focus on the parent company "Vivendi Universal". Which owns a lot more. Sometime kids just doesn't listen, and you have to talk to the "grown ups"

I don't know if I can boycot all Universal product... But can try.

Well. Check out Vivendi's Ethics and other statement. Tell me what you think of it.

"We all observe strict ethical standards: we act with integrity in all situations, respect the law, maintain harmonious and respectful relations with others, protect confidentiality, place professional ethics above consideration of financial performance, protect the company's property and resources and respect the environment. Honoring these ethical standards is a condition for being a part of Vivendi."

http://www.vivendi.com/corp/en/group/values.php

World these days. Only wish Apple could buy Vivendi :)

What goes around comes around.

Somewhere in southeast USA

handydan
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11/30, 01:16pm | report spam | close Reply |
Just steal the music then

I think everyone should just go back to P2P and steal all their music F*** the labels!

handydan
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11/30, 01:18pm | report spam | close Reply |
Just steal the music then

I think everyone should just go back to P2P and steal all their music F*** the labels!

Deal
Mac Enthusiast

Joined: Apr 2001

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11/30, 05:51pm | report spam | close Reply |
Agreed... BUT,

I agree that giving free money to a company just because their products could be played on them is a bad idea. Image Kodak having to pay artists because their painting could be photographed!

BUT, I think Apple will ink a smarter deal. It will be something like, we will create a special edition iPod that we will put a series of your movies on and give it a custom paint job. Then said company gets a share of the profit plus payment for the movies that it contains.

That way they are not getting FREE money, everything paid is aligned with some substantial product.

That would make sense and Apple is so much smarter than all these companies, they'll figure it out.

UberFu
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12/01, 01:00pm | report spam | close Reply |
for everyone saying Steve

...won't go for it like M$ did - Steve Jobs selling Pixar to Disney after that whole debacle with Eisner came out of left field_ I don't remember a single analyst or forum post say 'Steve will sell Pixar to Disney' instead it was speculation on who Pixar was going to go with instead of Disney for distribution since Pixar could hold its own_ Or maybe Pixar would merely purchase its own distribution company and keep it inhouse_

So never say never_ We'll have to wait and see what happens next year_

I think Apple is doing a good job on making a come back and they aren't up for making stupid decisions anytime soon_ I think that whatever does come of it - there will be advantage for both Apple and Apple customers since that is there track record from the beginning_

Look at the Intel switch_ A high majority of speculation at the time - I saw about that happening people and reporters were all saying that Apple would Opt into having the little 'Intel Inside' program - in part since Apple at the time had grabbed the moniker 'Mactel' the thinking was that it would become a variation of the the existing Intel tag on other computer manufacturer advertising_

I've seen new Apple ads over the past 12 months selling the Intel Macs and except for a couple of specific 'hey there's an new intel chip in this thing' style ads at the very beginning - I haven't seen any other Intel mentions in Apples commercials_

Apple tends to be very adament about distinguishing its own brand from everyone else_

The point is that it won't surprise me if Apple jumps into that bed about passing out 1$/iPod to each Music label - but Apple tends to lead the industry and not follow what everyone else is doing_ So yeah - whatever - Universal got the dominant software company around to rollover - i wish them good luck with getting Apple to ante up_

But something else - the music industry has no right to profits from the sale of hardware_ They also don't have control over the patents for most of the software that make distribution of their 'product' possible_ All they actually have contol over is the sound waves themselves_

So lets think about it:

A $1 charge from each Music Industry company needs to be applied for each of the following items:

- the makers of the wiring that goes inside

- the makers of the plastic

- the makers of the glass

- the miners of the metal ore

- the makers of the components

- any electric company that supplies power to the outlets where a consumer could conceivably plug in an iPod

- each auto maker that sold a car to a consumer who drove that vehicle to the store to buy an iPod

- any tire company who had tires on that vehicle as the consumer drove to the store

- any cab company that transported a consumer to a store

- any public trans

UberFu
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12/01, 01:01pm | report spam | close Reply |
cont.

- any public transportation entity that transported a consumer to the store

- the oil industry for supplying fuel to any vehicle that allowed a consumer to travel to a store

- each retail store that sold an iPod to a consumer

- any employee that sold an iPod to a consumer

- the graphic design company for developing and producing the packaging material for the product [which contributes to the sale of the iPod and any music from the iTMS]

- UPS and FedEx for delivery of the product to the consumer

- the media industry - TV stations - Radio staions - Magazines - Newspapers that run advertising of the product_

- the advertising agencies that develop the commercials for the iPod

- the band U2 - since they have a 'special edition iPod'

- Bono - since he specifically helps to promote it_

- Product Red since they are getting revenue from the Product Red versions

- the accounting firm that keeps track of the profits - the revenue - sales and so on

- the lawyers for paving things legally [$10 'cause theyr'e lawyers]

- any Internet Service Provider that allowed access to the consumer to purchase an iPod online

- any company that makes any sort of speaker device to plug into the iPod so the consumer can actually hear the music ['cause we can't have them not hearing the music]

- any online website store that made available the sale of an iPod to a consumer

- any restaurant that someone involved in the chain of manufacturing ate at while producing the iPod

- any employee of any company working to produce any version of the iPod

- and since Apple 'produces' both the hardware and the software coding for the iPod they get charged $2

[i could keep going with this for days - it's too easy]

Also let's chip in retro-active royalties for any previous versions that the Music Industry Companies haven't grabbed at until this point_

All because these things contribute to the end distribution of their copyrighted music and they can't get by on several billion dollars per year_ Those poor less fortunate Music Industry giants - the Bill and Melinda Gates Foundation may need to take a look at them 'cause that would be a good Cause_

The music industry demanding a dollar in royalties for the hardware is flat out bullshit which they have no entitlement to_

vertigociel
Forum Regular

Joined: Dec 2006

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12/03, 06:54pm | report spam | close Reply |
Incredible Greed

If this model were adopted in other industries, what would happen?

-The Movie Industry would get a percentage of everything sold with the capability to display or store movies - Every hard drive, Memory Card, DVD drive, and any product with a screen of any kind.

-Clearchannel would get a part of the profits of anything with the ability to detect radio signals - including wifi cards, TV tuners, and anything that contains metal.

-The p*** industry would profit every time someone has s** - also, they charge you if you happen to think about naked people.

It's ridiculous, absurd, and it won't happen. Apple will refuse, and if they refuse to sign anything with apple because of it, Universal artists will see their sales plummet massively, and the Label becomes the dodo of the music industry.

Sprocket
Fresh-Faced Recruit

Joined: May 2002

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12/04, 09:55am | report spam | close Reply |
Ha-ha-ha . . . Sod off!

These labels are leeches, and Universal is proving to be the worst -- this week, anyhow. Considering that Apple saved their asses with the ITMS concept, Universal should be thankful they are still in business, never mind trying to squeeze the life out of the Goose that is laying the Golden Eggs. Since I heard that Universal CEO 'Doug' believes iPod users are all thieves, I am boycotting all new Universal purchases and heartily I say to Universal: Sod off!

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Universal looks to share iPod profits

updated 09:00 am EST, Wed November 29, 2006

Universal looks to iPod

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Another reason to buy CDs

Microsoft's secret weapon

Unbelievable greed...

...

I would neotiat

sorry thats negotiate

s**** them!

Hah ha, no way

This should be amusing.

you knew that was coming

no way is it going to

Wishful thinking

stick it

My Goodness

Don't dismiss labels

Universal needs the money

iPod is not just MP3s

leverage

What if...

legalize copying music?

Dig, Doug

Arsehole!

share of profits??

sounds fair

Stealing Music

We have no rights

re: stealing music

re: Zune Marketplace

omg no...

RE: what if

does not make sense to me

f*** Universal

In a word: No!

Hmmm...

Think Vivendi Universal

Just steal the music then

Just steal the music then

Agreed... BUT,

for everyone saying Steve

cont.

Incredible Greed

Ha-ha-ha . . . Sod off!

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