The big music publishers have always thought they should get better royalties from Apple (NASDAQ: AAPL) iTunes, and with good reason. Their CD sales are diving as music downloads online grow and, in the case of illegal downloads, they get nothing.
Vivendi Group's Universal Music division appears ready to make a stand. The world's largest music publisher informed Apple last week that it will not take a standard one-year renewal with iTune. Rather, it will make its music available ad hoc. Vivendi has several big artists on its label, including U2.
While Universal could get into a nasty fight with Apple that it might no win, the music publishing industry cannot watch its revenue drop forever. Apple might consider blocking Universal's content, but that could lead to an antitrust showdown. Universal's artists might object to a deal that brings them less money.
But, Apple cannot afford to have several publishers follow Universal's lead.
Makes things a wee bit tense.
Douglas A. McIntyre is a partner at 24/7 Wall St.