Can Universal Music put a dent in iTunes with Total Music?

Stan Beer
Tuesday, 16 October 2007 16:58

Opinion and Analysis

For quite some time, it's been no secret that the world's largest recording company Universal Music Group and Apple have been at loggerheads over the power that the iTunes online music store now wields in the market. It seems that every other month UMG announces a deal designed to cut iTunes out of the picture. Can Total Music succeed where previous attempts have failed?

Around 13 months ago UMG announced free ad supported music downloads through the SpiralFrog website. But iTunes just continued to grow and grow along with iPod sales.

More recently UMG announced it would no longer be party to any long term iTunes contracts with the implied threat that it could pull its music from the store at any time. To date, no UMG music has been withheld.

Then, after Apple announced a DRM free iTunes music sales deal with EMI, UMG came out with its own DRM free trial deal with iTunes rivals including Amazon, Wal-Mart, Best Buy and Rhapsody, that undercut the iTunes prices on both DRM and DRM-free music.

Despite all of these frontal attacks on Apple, however, there is no sign that UMG is putting a dent in the market share of iTunes or the voracious appetite of consumers for all things iPod, including iPhone and the new iPod Touch series.

So will Total Music, a new initiative from UMG that includes Sony BMG and maybe Warner Music Group, accomplish what UMG's boss Doug Morris so dearly wants - the weakening of the iTunes stranglehold? Possibly but probably not.

Total Music basically involves the major recording companies cutting a deal with cellphone manufacturers and possibly other non-Apple portable music player makers whereby the price of music downloads is incorporated into the price of the players. The idea is to fool people into believing they are getting music for nothing in a similar way that cellphones are often sold on service contracts with no upfront cost.

In fact, the idea is not a bad one as far as mobile phones are concerned. However, the problem for UMG is that iPods (including the iPhone) are so darned popular and the way to get legal music onto them is through iTunes.

Mobile phone music services and music subscription services have been around for years. Far cheaper music players than iPod have been around for years. Although more than 3 billion music tracks have been downloaded to iPods, the stats say that's just a small fraction of the music on the most popular music player in history. Will iPod owners give up their cool devices for the promise of "free" music on mobile phones and suddenly more expensive alternative music players? Possibly but probably not.