Universal goes cool on iTunes Store

Stephen Withers
Monday, 02 July 2007 12:05

Your IT - Home IT

Universal has reportedly declined to renew its contract with Apple's iTunes Store.

According to reports (Reuters, New York Times and others), Universal Music has notified Apple that it will not renew the contract allowing Apple to sell the company's music through the iTunes Store.

Instead, an "at will" arrangement will mean Apple can keep selling Universal tracks, but the label can cancel the deal at short notice if it chooses. It could also allow Universal to make exclusive arrangements with other music download services covering all or part of its catalogue.

Neither company has issued a statement, but it seems likely that the sticking points include some combination of Apple's insistence on fixed pricing, Apple's refusal to follow Microsoft's lead and pay music companies a royalty based on hardware sales, the iPod's inability to play content protected by DRM schemes other than Apple's FairPlay,

Universal accounts for around one-third of album sales in the US. Its artists range from Ashlee Simpson to BB King, Will Smith to Willie Nelson. Conversely, Apple is the third biggest music retailer in the US behind mass merchants Wal-Mart and Best Buy.

Apple reached agreement with EMI earlier this year to sell unprotected tracks (at higher audio quality and prices), and - according to the New York Times - Sony recently renewed its contract with Apple.