Menu
iTunes rebellion in the wind, report says

iTunes rebellion in the wind, report says

The head of Universal Music Group is enlisting the support of other major record labels to launch a new music subscription service that will try to loosen Apple's grip on the online music market, according to a news report last week.

Universal CEO Doug Morris has already enlisted Sony BMG Music as a potential partner and is in talks with Warner Music Group about joining the effort, which aims to counter what the music industry sees as Apple's overly stringent restrictions on the way they can market their music.

The report, in the online version of BusinessWeek, cites mostly unnamed insiders said to be familiar with Morris' plan. As well as launching a rival to the iTunes music store he hopes to nurture the adoption of other music players such as Microsoft's Zune, and develop a new business model in which music for consumers becomes essentially free, the report said.

The music industry is understood to be widely dissatisfied with the terms that Apple imposes for its iTunes store. Apple has insisted on selling all tracks at a uniform price, for example, while the labels would like to charge different prices for new and older music.

The conflict became public in July when Universal, which puts out one in every three new songs released in the U.S., decided not to renew its long-term agreement to release its music through iTunes. It now markets its music on an "at will" basis that leaves it freer to sign contracts with other distributors such as cell phone carriers.

Jean-Bernard Lévy, CEO of Universal Music's parent company, Vivendi Universal SA, said last month that the share of revenue that Apple collects for each song sold on iTunes is "indecent," according to reports at the time. He said Apple takes about $0.29 for each $0.99 song sold.

Morris is looking to wrest some control back from Apple and change the way digital music is sold with a new service called Total Music, according to BusinessWeek. The plan is to get hardware makers to absorb the cost of a $5 monthly subscription, so that consumers would get their music essentially for free when they buy a new player, and the hardware industry would be compensated by selling many more devices.

The plan is still in flux and faces several hurdles, BusinessWeek notes. Among them is finding a business model that allows the hardware makers to subsidise the cost of the music. In addition, the labels have tried to develop their own online music services before without success.

They wouldn't be the first companies to take steps against Apple's dominance. In August, MTV Networks said it would abandon its own digital music service, called Urge, and pool its efforts with RealNetworks's Rhapsody service to create a better iTunes rival.

It was unclear how the new service would approach the issue of DRM (digital rights management). Universal began a six-month trial in August offering music without copy protection -- with the exception of the music it sells through iTunes. If the new service were to offer DRM-free songs it would make it easier for it to target a wide range of music players.

Meanwhile Sony said recently that it would abandon its proprietary ATRAC copy-protection technology, and add Microsoft's Windows Media technology to its music players instead. At the same time, Sony said it would close its Connect Music Store in Europe and the U.S., an acknowlegement that it had been unable to dent Apple's iTunes sales.


Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags sonyiTuneszuneUniversal

Events

Featured

Slideshows

Meet the Reseller News 30 Under 30 Tech Awards 2020 winners

Meet the Reseller News 30 Under 30 Tech Awards 2020 winners

This year’s Reseller News 30 Under 30 Tech Awards were held as an integral part of the first entirely virtual Emerging Leaders​ forum, an annual event dedicated to identifying, educating and showcasing the New Zealand technology market’s rising stars. The 30 Under 30 Tech Awards 2020 recognised the outstanding achievements and business excellence of 30 talented individuals​, across both young leaders and those just starting out. In this slideshow, Reseller News honours this year's winners and captures their thoughts about how their ideas of leadership have changed over time.​

Meet the Reseller News 30 Under 30 Tech Awards 2020 winners
Reseller News Exchange Auckland: Beyond the myths — how partners can master cloud security

Reseller News Exchange Auckland: Beyond the myths — how partners can master cloud security

This exclusive Reseller News Exchange event in Auckland explored the challenges facing the partner community on the cloud security frontier, as well as market trends, customer priorities and how the channel can capitalise on the opportunities available. In association with Arrow, Bitdefender, Exclusive Networks, Fortinet and Palo Alto Networks. Photos by Gino Demeer.

Reseller News Exchange Auckland: Beyond the myths — how partners can master cloud security
Reseller News welcomes industry figures at 2020 Hall of Fame lunch

Reseller News welcomes industry figures at 2020 Hall of Fame lunch

Reseller News welcomed 2019 inductees - Leanne Buer, Ross Jenkins and Terry Dunn - to the fourth running of the Reseller News Hall of Fame lunch, held at the French Cafe in Auckland. The inductees discussed the changing face of the IT channel ecosystem in New Zealand and what it means to be a Reseller News Hall of Fame inductee. Photos by Gino Demeer.

Reseller News welcomes industry figures at 2020 Hall of Fame lunch
Show Comments