Zune Price Includes Cut For Record Company

Nov 9th, 2006 | By | Category: iPods & Portable Media Players

RIAA LogoMicrosoft has announced that it will be giving a cut of the sales of its Zune portable music player to the Universal Music Group in order to create closer ties with record companies and steal market share away from Apple’s iPod. Microsoft has made similar offers to the other major labels.

If successful, Microsoft’s move could lead to higher prices for portable media players as manufacturers are forced to share profits with the major record labels in order to get access to content. The move could backfire, though, since more and more people are using portable players to listen to podcasts and indie music.

“This is another way for Microsoft to try to drive a wedge between Apple and the record labels,” according to Michael Gartenberg, an analyst at JupiterResearch in New York. “It could gain Microsoft exclusive content or content before Apple and all it costs Microsoft is money.”

The major label RIAA members have been looking for ways to get a cut from digital music players, arguing that they can be used to store illegal copies of copyrighted music.

via Bloomberg

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