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 Post subject: Zune profits to be shared with Universal
PostPosted: Thu Nov 09, 2006 4:25 pm 
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Microsoft agrees to share profits of the Zune with Universal and possibly other record abels.

Quote:
In a rare move, Microsoft said yesterday that it had agreed to pay a percentage of the sales of its new portable media player to the Universal Music Group.

Universal Music, a unit of Vivendi, will receive a royalty on the Zune player in exchange for licensing its recordings for Microsoft’s new digital music service, the companies said.

Universal, which releases recordings from acts like U2 and Jay-Z, said it would pay half of what it receives on the device to its artists. The company is expected to receive more than $1 for each $250 device, according to executives who were briefed on the pact.

The deal represents a big departure from the standard set by Apple Computer, which pays record companies for songs sold through its iTunes service but does not give them a cut of the sales of its hugely successful iPod.

Under the deal, Universal, the world’s largest music corporation, will receive a percentage of both download revenue and digital player sales when the Zune and its related service are introduced next week.

[snip]

In addition, the deal may provide leverage for Universal to insist on a cut of future iPod sales when its existing contract with Apple expires next year.

“It’s a major change for the industry,” said David Geffen, the entertainment mogul who more than a decade ago sold the record label that bears his name to Universal. “Each of these devices is used to store unpaid-for material. This way, on top of the material people do pay for, the record companies are getting paid on the devices storing the copied music.”

He added: “It certainly changes the paradigm.”


Last edited by legonads on Thu Nov 09, 2006 7:17 pm, edited 1 time in total.

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PostPosted: Thu Nov 09, 2006 5:09 pm 
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Street Teamer

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this seems pretty lame... i'm not averse to some of the money from sales going back to artists and music companies. That's been the case with blank cassettes and CDs from the very beginning. What's sad is that only major labels get money from the RIAA. It becomes just another unfair advantage in an already insanely huge list. Seems like letting Soundexchange manage the royalty would be more equitable.


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PostPosted: Thu Nov 09, 2006 5:51 pm 
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Go Platinum
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lego's post title is confusing. Nowhere in this article does it say Microsoft is giving money to the RIAA. It says they're giving money to Universal and will offer a similar deal to the rest of the industry. Since Zune comes pre-loaded with some indie music (e.g., CSS on Sub Pop) I imagine they're not only offering it to majors.

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PostPosted: Thu Nov 09, 2006 7:16 pm 
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Winona Ryder wears my t-shirt on TV

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I just assumed that other partners would be RIAA members. Seems unlikely that they'd be sharing profits with the littler guys, but okay, it's possible.


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PostPosted: Thu Nov 09, 2006 10:30 pm 
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Street Teamer

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just because labels like Domino and Sub Pop were able to get a promotional opportunity for one of their artists is not sufficient reason to think they'd be in line to get a cut of Zune sales. I can almost guarantee you that is not the case. Universal has considerable leverage. Indie labels have none really.


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PostPosted: Sun Nov 12, 2006 3:52 pm 
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Bedroom Demos
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That should be good for 5 or 10 bucks. I imagine U2 can put that to some good use. ;)

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