By Gemma Simpson, 10 November 2006 15:25
NEWS
Microsoft has agreed to pay Universal Music Group (UMG) a per-device royalty for each of the Redmond company's Zune digital music players the music company sells.
Microsoft will pay UMG around $1 for every $250 Zune sold plus a percentage of download revenue, according to reports.
The death of the iPod?
Check out part one and part two of silicon.com's Minority Report on the fate of Apple's mighty MP3 player.
A Microsoft spokesman said the company is hoping to support artists and ensure they continue to prosper with the emergence of digital music - and to help the music industry through this transitional period.
Universal is reported to have said it was only fair to receive payment on devices that may become repositories for stolen music.
More than 80 per cent of content providers believe piracy to be a threat to their business, research from security firm SafeNet reveals.
Despite this figure 60 per cent of content providers are yet to invest in digital rights Management (DRM), which could alleviate the problem.
SafeNet managing director Simon Blake-Wilson said the demand for online music and television is continuing to grow rapidly and DRM technology is essential to guard all digital content from illegal downloads.
Comments
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1. anonymous
This is a total scandal!
a) Microsoft let the music giant rule there business, but that's OK with them since it's gonna screw next year negociations with Apple and the music labels. And they win something.
b) The music industry will get compensation* for pirated music, so in a way, they're telling me that it is OK to get my music from P2P network. I own an iPod which is filled by approx 20Gigs of music that I legally acquired (from CDs or iTMS). From now on, I wont be bothered to get pirated music. It's a question of fairness, which must come from both sides: the consumers AND the sellers.
c) Music industry is just a content provider. They may care about distribution channels (legal or not, traditional or not) but it's absolutely none of their business how, when or how often I enjoy their content. The iPod or Zune may be a big part of the new digital ecosystem, their only concerns is quality and distribution channels. Period. (in Apple's business case: iTunes and iTMS)
Now they act like they invented music, like they own Music!!! Maybe I should send them a check for every time I played some old Elton John's song!!
2. Music Lover
Articles like this simply show that MS and reporters are clueless about DRM. Restrictions lessen the value of the media. Further, most media on music players come from ripped CD's -- a totally legal way to listen to music.
The real ipod killer is not zune. It is a combination of cheap flash music players (under $25 now), cheap audio/video players (under $75) and cell phone MP3 players. The online music store doesn't matter much at all.
3. Fred Mook
This is a dangerous precedent being set and certainly does not benefit artists or the end user.
Microsoft did not need to pay UMG anything, and now they have opened the door for others to request a fee as well. The reasoning is simply to attack the iPod however this approach also helps to firm the grip of the rights mob and prevent independent cliques formed of artists from gaining much of a foothold in the digital marketplace.
There is surely more here than is being let on and this is clearly not the end of the story. It is also out of touch that people are still touting DRM as the saviour of the industry - what rubbish.
Charge a reasonable fee for electronic downloads and let people use them on their devices happily without headache via a solid interface and people will buy more... of course, they'll have to stop charging for packaging, manufacture, distribution, etc. costs to make the price realistic (though this shouldn't be tough since I've never downloaded my audio in a box!)
Watch this space to see the real story evolve, as it is not about Microsoft wanting to protect artists!
4. Richard A
"Universal is reported to have said it was only fair to receive payment on devices that may become repositories for stolen music."
- Oh yeah, just like in the Seventies when there was that unpopular tax on G-Plan HiFi cabinets that became repositories of pirated cassettes. Heady days!
Trouble was, having paid our piracy tax we naturally felt entitled to go ahead and test the waters of home-taping. (It didn't kill music after all).