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Zune Profits Go To Record Label 155

Posted by kdawson
from the how-to-bleed-the-iPod dept.
genegeek writes, "The New York Times reports that Microsoft has a new deal with Universal to share profits from Zune player sales. David Geffen, the media omniboss, is quoted: 'Each of these devices is used to store unpaid-for material...' The new business rationale is that stolen music should be paid for by profit sharing of newly sold Zune music players. Does that mean if you are not stealing music, you should get a discount on the players? Universal expects a similar deal from Apple when their current contract expires." Reader Gallenod adds, "Microsoft appears willing to spend millions and defer any potential profitability of the Zune simply to weaken Apple's bargaining power with recording companies and set a precedent for hardware manufacturers paying music companies."
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Zune Profits Go To Record Label

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  • Great (Score:5, Insightful)

    by AoT (107216) on Thursday November 09, 2006 @11:47AM (#16786085) Homepage Journal
    "set a precedent for hardware manufacturers paying music companies."

    Yeah, remind me to thank Microsoft for all this 'innovation' they've done for the customer the next time I'm up in Redmond.
  • by jimstapleton (999106) on Thursday November 09, 2006 @11:50AM (#16786139) Journal
    'Each of these devices is used to store unpaid-for material...'
    Really? That guy is a dipshit (pardon my language, but nothing "softer" is better at describing this)

    WTF. /NONE/ of the music on my portable mustic player is or has ever been stolen. I know plenty of people in the same boat. Admittedly none of them are Zune, but that that doesn't make the asshat's claim any less false.
  • by Incongruity (70416) on Thursday November 09, 2006 @11:52AM (#16786177)
    They're trying to charge me (indirectly) for stealing their music (which I don't, never have, and never will) -- so I'd want my money back. Greedy bastards. How dare you treat customers like presumed crooks?
  • What a pantload. (Score:4, Insightful)

    by Rob T Firefly (844560) on Thursday November 09, 2006 @11:53AM (#16786205) Homepage Journal
    So how much will MS be paying all the unsigned bands who are duping their own discs without the "benefit" of a label?
  • Yeah right... (Score:5, Insightful)

    by twofidyKidd (615722) on Thursday November 09, 2006 @11:54AM (#16786215)
    "Microsoft appears willing to spend millions and defer any potential profitability of the Zune simply to weaken Apple's bargaining power with recording companies and set a precedent for hardware manufacturers paying music companies."

    This will go over like gangbusters with Apple and consumers alike. To think that the record industry will try to leverage a deal with another business with regards to consumer goods (music) is ridiculous. Nevermind the fact that Apple will simply leverage their massive iPod fan base against the labels, customers just won't stand for it. Especially when the market for digital media players is already supported by people who have proven they are willing to pay for music, a label-imposed "tax" on those players to cover "stolen content" won't fly.
  • by Viewsonic (584922) on Thursday November 09, 2006 @11:54AM (#16786223)
    This is kind of amusing. So does this mean if we pay a "piracy tax" up front, that we can then pirate music? And how can a music company possibly expect Apple to make some sort of deal like this. Are they going to boycott Apple if they don't? Haha.
  • Not Good. (Score:3, Insightful)

    by Thansal (999464) on Thursday November 09, 2006 @11:54AM (#16786225)
    This is not a good precident. I know other countries already have a blank media tax, and I always thought this was ONE way the USA was better off then said countries.

    The concept of paying RIAA companies because they are selling something that COULD be ussed to infringe on their copywrites is just a horrible idea.

    Even assuming that this is a good idea, the problems are still obvious:
    Do unsigned bands get a share? what about companies not part of the RIAA?
    Do gun manufacturers have to proffit share with police (after all, guns could be used to commit crimes), what about with regular citizens, quikymart owners (after all, they are at a higher risk)?

    Just because somethign CAN be ussed to to commit an offence does not say that it WILL be.

    and as TFS says, if I only use my MP3 player for legitamite purposes, can I seek a refund? (as I am sure that MS is not going to just hand over part of their proffits, they will just include the price in the player).
  • On the flipside... (Score:5, Insightful)

    by MrAnnoyanceToYou (654053) <dylan@nospAM.dylanbrams.com> on Thursday November 09, 2006 @11:57AM (#16786277) Homepage Journal
    If I'm paying for pirating music before I do so, it's now ethical for me to pirate however much music I want.

    The amusing thing here is that the 'prepaid pirating fee' doesn't go anywhere near the artists. Ever. It's just an inter-company corporate bribe. Between monopolistic organisations. Man, can't you feel that capitalistic efficiency?
  • All you can eat (Score:3, Insightful)

    by ericlondaits (32714) on Thursday November 09, 2006 @12:00PM (#16786323) Homepage
    If it means I no longer have to pay for any Universal CDs because Microsoft is doing it for me then I'm getting a Zune right now! Woo hoo!

    But I suspect that just like with the "blank cds tax" it means you are paying for being suspect of doing something that's still illegal and which you might get sued for. Brilliant... a tax that you shouldn't be paying, either because you don't download illegal MP3s or because accepting the tax as rightful means admitting to doing "copyright violations".
  • by 0racle (667029) on Thursday November 09, 2006 @12:02PM (#16786347)
    This will go over like gangbusters with ... consumers alike. To think that the record industry will try to leverage a deal with another business with regards to consumer goods (music) is ridiculous. ... customers just won't stand for it.
    You mean how consumers won't put up with everything that they put up with? Consumers in general will never care because for the most part they will never know.

    Have you ever watched people shop? They buy what appears to be a good deal they don't look into whether it is or not. Consumers in general are idiots, and I don't know where the idea that they aren't came from.
  • by AHumbleOpinion (546848) on Thursday November 09, 2006 @12:03PM (#16786361) Homepage
    "Microsoft appears willing to spend millions and defer any potential profitability of the Zune simply to weaken Apple's bargaining power with recording companies and set a precedent for hardware manufacturers paying music companies."

    Selling at cost or a loss to gain marketshare is hardly anything new, we're talking Econ 101. Apple basically did so with their on-line store, they wanted to spur use of the iPod. Microsoft is doing pretty much the same thing except they are discounting the hardware to spur use of their on-line store. On-line sales is where Microsoft sees the future, take a look at XBox Live, micropayments of add-ons, etc.

    With regard to "setting a precedent", more Econ 101. Using a low price point to establish a barrier to entry. Another predictable move as digital music players become mass market commodity items. iPod dominates the current market, but the current market is a small fraction of the potential market. We are only now leaving the early adopter phase. iPod's current success is not unlike Apple's success with the Apple II when the personal computer market was in it's infancy. Apple pioneered the way then and now, but back then failed to capitalize on that early success to dominate the emerging market. Has Apple learned, or will history repeat itself? I don't know. I tend to think Apple has learned, however I think that this will translate into Apple being one of several major players in the future mature digital music player market. I don't think anyone will be able to dominate as IBM did with PC hardware and Microsoft did with PC software.
  • by bealzabobs_youruncle (971430) on Thursday November 09, 2006 @12:16PM (#16786513)
    sell a whole lot of Zunes for this to be relevant when Apple's contract comes back up. MS is a joke when it comes to consumer issues, showing once again all of their media products are about protecting greedy publishers first and user convenience somewhere much further down the list.
  • Not buying one (Score:4, Insightful)

    by Russ Nelson (33911) <slashdot@russnelson.com> on Thursday November 09, 2006 @12:17PM (#16786533) Homepage
    Since I'm not buying a Zune, I don't care where Microsoft sends its money.
  • by sockonafish (228678) on Thursday November 09, 2006 @12:23PM (#16786585)
    Apple already operates the iTunes Music Store at close to zero profits. It only exists to spur sales of iPods. They're not going to forgo iPod profits to please overly greedy record companies.

    Apple has stood up to far less ridiculous demands before, like price increases. They're not going to cave on this one.

  • by MikeRT (947531) on Thursday November 09, 2006 @12:25PM (#16786603) Homepage
    Microsoft has just done the unthinkable: they have acknowledged some "social responsibility" to police themselves, genuflect before the Altar of Starving Musicians and Aggrieved Businessmen and generally do the bidding of another industry. It's as f$%^ing stupid as a gun manufacturer agreeing to whatever Handgun Control Inc wants in the name of "keeping guns out of criminals' hands."

    Policing bad behavior is for the courts. People who make perfectly valid tools don't owe jack to those who are hurt by their misuse. Get a damn grip, Microsoft. You aren't hurting Apple's marketshare, you're hurting your lobbying efforts and things like that.
  • by gillbates (106458) on Thursday November 09, 2006 @12:27PM (#16786633) Homepage Journal

    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.

    So let me get this straight: you pay Universal when you buy the device, and then you pay them again for the music you load on to it?

    What if I never listen to any of Universal's music?

    What really strikes me as ridiculous is that Universal's terms seem to imply that even a legitimate music purchase is still piracy .

    At this point, the only moral thing to do is to stop buying music. You aren't going to appease the record companies - they'll call you a pirate no matter what. If we all stopping funding the RIAA lawsuits, maybe they would go away.

  • by The Faywood Assassin (542375) <benyjrNO@SPAMyahoo.ca> on Thursday November 09, 2006 @12:29PM (#16786663) Homepage
    The Zune is so DRM laden and an example of "This is what we tell you that you want" that sales will only be great for a month before people regret their purchase and return them.

    Case in point, their Wi-Fi "borrowing" crap. Instead of using Wi-Fi to do something useful, they simply use it as a reminder that they control what you do with the device.

    Universal, the profit on no sales is $0.

    Beny
  • Cease and desist! (Score:4, Insightful)

    by Opportunist (166417) on Thursday November 09, 2006 @12:31PM (#16786685)
    So, what this technically tells me is that everyone who buys a Zune already pledges guilty of being a criminal, infringing copyright? Because, well, at least in my country, there should be no punishment without verdict, no (positive) verdict without crime.

    So either lift that or I will not even go near a Zune. I am NOT infringing copyright, and anyone who says otherwise should either put proof on the table or face me in court.
  • by tthomas48 (180798) on Thursday November 09, 2006 @12:36PM (#16786757) Homepage
    Getting a discount shouldn't be joke. I don't pirate music. Period. All of my music currently has a corresponding CD in a cabinet on the wall in my living room. There are over 400 of them. This is a great reason not to buy a Zune. I don't want to be giving more money to the record companies than I need to. And I'm sure the profits this generate will not go to artists in any way.
  • by Incongruity (70416) on Friday November 10, 2006 @11:41AM (#16794074)
    No, your analogy fails -- and you admit it by saying "[bricks and mortar stores] presume that 'some' customers are crooks".

    It's one thing to institute inventory loss controls, as a retailer, and completely another thing to demanding that some other company subsidize your failing business model while implying that all customers of that other company steal your product and as such should be billed for it. Directly compounding operating expenses is one thing -- yes, we all pay a little more at best buy and CC because other people steal and because they have to pay for security systems, but we also have to pay a little more because energy costs and medical costs have gone up and we'll have to pay more if the minimum wage goes up. Those are all operating costs of the retailer. I get that. What I don't get is how a third party feels they have the right to insist that they get money from a legitimate purchase because they're being stolen from. That's NOT the same thing. The record/media/contant companies have the same option available to them -- raise their prices to recoup losses from theft. What makes them so special that they can demand more money from everyone purchasing someone else's product? They claim it's because that product is used for piracy and I resent that, being the user of a similar (albeit non-MS branded) product.

    Should the content industry also demand money from every vehicle sold because some are used to transport pirated content? Should they demand money from every headphone and speaker manufacturer because some headphones and speakers are used to listen to pirated content? Should every paper company be paying the major book publishers $.20 for every ream of paper sold because some of it is used to make photocopies in violation of copyright laws? Should backpacks have a surcharge placed on them because they frequently carry burned copies of pirated CD's or movies? Should major cities like New York or Tokyo have to pay a few cents for every 10 feet of sidewalk because some street vendors sell bootleg copies off of folding tables on those very sidewalks? Of course not.

    Most, if not all of the examples above a laughable, but all are directly comparable -- especially the paper surcharge example and when you think about it by making those comparisons, it illustrates exactly what the greedy and desperate media companies are up to. It's nothing short of money grabbing fueled by greed and desperation, rather that content and product innovation. So, again I say, shame on them.

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