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A new report today indicates that Universal Music Group chief Doug Morris is aiming to create an industry-wide competitor to Apple (NASDAQ: AAPL)'s iTunes Store. According to BusinessWeek, Morris has already enlisted Sony BMG, a merger between Sony Entertainment (NYSE: SNE) and Germany's BMG, and is in talks with Warner Music Group (NYSE: WMG). The service Morris intends to create will be called Total Music and "move digital music beyond the iPod-iTunes universe by nurturing the likes of Microsoft (NASDAQ: MSFT)'s Zune media player and Sony's PlayStation and by working with the wireless carriers."
The move comes after Morris and UMG declined to renew a multi-year contract with Apple in July because Steve Jobs and company would not "ease stringent terms limiting how record companies market their music." At this time, Universal's music remains available on iTunes on a month-to-month basis. The new subscription-based service would ask "hardware makers and cell phone carriers to absorb the cost of a roughly $5-per-month subscription fee so consumers get a device with all-you-can-eat music that's essentially free." In that model, the music companies would take the fee and the manufacturers and carriers would sell more devices, in theory.
The new service is also attempting to bank on calling music a utility that consumers are entitled to own. BusinessWeek comments that this is a lot like the iTunes model but takes it one step further, and reminds us that the music companies have set up subscription services before and failed to maintain a place in the market. The one question that remains is whether consumers buying the devices and subscribing for $5 will be able to keep the music they download? If this model is based on iTunes, then that would be a resounding yes. Otherwise, it is simply another service that takes the control of music "ownership" out of the consumer's hands. It's hardly a utility if you have to give it back.
Universal recruits record companies to compete with Apple's (AAPL) iTunes
Posted Oct 12th 2007 4:30PM by Richard Driver
Filed under: Products and Services, Launches, Consumer Experience, Microsoft (MSFT), Apple Inc (AAPL), Sony Corp ADR (SNE)
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Reader Comments (Page 1 of 1)
10-13-2007 @ 2:02AM
microdol said...
You would think these industry giants would realize Apple make a very SMALL amount of their revenue from iTunes sales - < 8% actually.
But they are making a killing in hardware.
10-14-2007 @ 12:45AM
Nohjnogias said...
These people are so very jealous of Apple's success that they will cut off their own nose to spite their face, anything, anyhow, anyway, if they can inflict even minor damage on the object of their jealously. I'm all for competition, but the problem is they're upset with the brilliant ideas they cannot themselves match. All they're left with is envy. They will have to make the Zune and all of their logos deep green.
10-14-2007 @ 10:20AM
URight said...
Nohjnogias. I wanted to say the same exact thing... but you beat me to it... The OLD GIANTS are just so used to be in complete control, but now they have none and are lashing like little babies at anyone that is doing things better than them. iTunes only problem is that it WORKS! it makes things easy for the the consumer, but that is not how the majors like it. they want to make things good for themselves and thus hate iTunes and everything that it stands for. 2 things might happen. Either this new venture succeeds or it fails. but the only way these companies would come back to iTunes if there would be a shakup at the top otherwise I agree with you, they would rather cutoff their own heads than play nice with a partner they envy.