Has UMG Approached Apple?
March 21, 2008 at 5:50 AM (PT)
CNET NEWS is reporting that UNIVERSAL MUSIC GROUP Chairman/CEO DOUG MORRIS has approached APPLE with an idea to offer a device that comes preprogrammed with UNIVERSAL MUSIC's entire library on it. A music industry source said WEDNESDAY night that APPLE has broached the idea of bundling music with the other three major labels, but didn't show much enthusiasm for the plan. "APPLE was just inquiring about whether this kind of thing would interest (the other record companies)," said the source.
The plan now is to partner instead of just being a vendor.
Insiders say UMG wants to pump life into the subscription model, MORRIS wants a slice of device sales from any gadget maker that licenses his music, similar to the ZUNE deal. The report indicates MORRIS also has ambitions of turning UNIVERSAL MUSIC into a total entertainment company.
The plan now is to "partner instead of just being a vendor," a source close to the label told CNET.
"All You Can Eat" Deal?
In the proposal UNIVERSAL MUSIC pitched to APPLE, the device would come with all-you-can-eat music for a period of time, perhaps a year, and then owners would be "rolled over into a subscription service."
UNIVERSAL MUSIC was a big backer of an ISP tax, according to reports. And last OCTOBER, BUSINESSWEEK reported that MORRIS had also toyed with the idea of enlisting the other three majors to create a music-subscription service. The plan seemingly was derailed when the U.S. JUSTICE DEPARTMENT began investigating whether such a consortium would violate antitrust laws.
What can't be overstated is UNIVERSAL MUSIC's desire to get a taste of device sales, insiders say. Back when APPLE's iPODS became the rage, everybody in the music industry realized they missed an opportunity. While JOBS made pennies on song sales at iTUNES, he pocketed 50% profits on some iPOD models, according to estimates by ISUPPLI.
The CNET article also says, "It's safe to say that almost all the major players in the music industry see that as unfair. They argue that what people want isn't a music player. It's the music."