Universal Remembers Where The Hatchet Is Buried
Universal Music Group has notified Apple that it's not renewing its annual contract that allows Apple to offer Universal's music through Apple's iTunes service. They haven't ended the relationship entirely, as Universal continues to market through iTunes as a sort of tenant at will. It's all about leverage when the pennies get counted.
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.
But if Apple were to decide not to carry Universal’s
recordings, the music company would likely sustain a serious blow:
sales of digital music through iTunes and other sources accounted for
more than 15 percent of Universal’s worldwide revenue in the first
quarter, or more than $200 million.
So Universal can only threaten Apple with a sort of music business murder/suicide; I'll hurt myself to hurt you. Perhaps they've been listening to too much Emo music over there.
