Universal Threatens To Pull Out Of iTunes Store

Jul 2nd, 2007 | By | Category: Digital Music, iPods & Portable Media Players

The New York Times reports that Universal Music Group, the world’s largest music company, has notified Apple that it will not renew its annual contract to sell music through iTunes.

It’s too early to tell if this is a negotiation tactic or a change in strategy for Universal, but the company said it would market music to Apple at will, which would let Universal remove its songs from the iTunes store on short notice if the two sides do not agree on pricing or other terms:

In the four years since iTunes popularized the sale of music online, many in the music business have become discouraged by what they consider to be the near-monopoly that Mr. Jobs has held in the digital sector — the one part of the music business that is showing significant growth. In particular, Mr. Jobs’s stance on song pricing and the iPod’s lack of compatibility with music services other than iTunes have become points of contention.

By refusing to enter a long-term deal, Universal may continue to press for more favorable terms from Apple or even explore deals to sell its catalog exclusively through other channels. If Universal were to pull its catalog from iTunes, Mr. Jobs would lose access to record labels that collectively account for one out of every three new releases sold in the United States, according to Nielsen SoundScan data.

The music industry would like to have more control over pricing in iTunes, instead of the fixed prices per tracks that Apple prefers.

No Responses to “Universal Threatens To Pull Out Of iTunes Store”

  1. dave says:

    Unless Universal has the ability to charge the consumer more for songs sold via iTunes than what is charged in stores like WalMart, even though their distribution costs through iTunes are negligible, Universal will not be able to pay the artists signed to their label and piracy on the internet will only increase. We all must support Universal’s need for more money!

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