Free Music Service to Compete with iTunes

Oct 15, 2007 by Lisa Zyga weblog
Universal Music
Universal Music will attempt to bring down Apple´s iTunes´ monopoly with a free online music service.

Universal Music plans to launch a new mobile music service where all songs will be free, according to a recent article in BusinessWeek. To be called "Total Music," the concept would include iPod alternatives that come with free subscriptions to the online service, and would be free of ads.

Reportedly, two other major record companies, Sony BMG and Warner Music, are already on board, and Microsoft—with its Zune player—is another potential partner. Together, Sony, Warner and Universal, which control about 75% of the music released in the U.S., could have a huge impact on the industry. With that kind of support, Universal chief Doug Morris hopes to drastically change Apple´s iPod-iTunes monopoly on the online music market, which currently accounts for about 70% of all music downloads.

Total Music would be paid for by carriers and some hardware manufacturers, which would pay about $5 per customer per month for the service. In exchange, the thinking goes that these companies would receive a competitive advantage in securing long-term customers. According to BusinessWeek, Universal estimates that an average customer would remain with the same device or carrier for about 18 months, and then upgrade with the same company to continue getting free music.

Besides assuming that customers will regularly upgrade, one of the other big questions in the experiment is whether the initial cost of the hardware or carrier would be significantly higher than similar devices, in order for the companies to cover part of the subscription fee.

Last July, Morris decided not to renew a multi-year contract to release Universal music through iTunes (although Universal artists are currently still on iTunes), and recently, Universal has been trying to offer alternatives to Apple services. These trials include offering downloads of music videos by Universal artists through AT&T, and, on a trial basis, through Best Buy, Google, and Wal-Mart, which can be used with any music player.

A large part of Universal´s motivation is to counter what the music industry sees as Apple´s overly stringent restrictions on the way they market music. For example, Apple insists on selling all tracks at a uniform price, while many labels would prefer to charge different prices for new vs. older music. Further, Apple keeps $0.29 from every $0.99 track that it sells, which Vivendi CEO Jean-Bernard Levy calls "indecent."

Conversely, according to ex-MCA Records Chairman Irving Azoff, owner of Azoff Music Management Group, "The artists are behind [Morris]."

Additional details about the service, such as how the companies would split profits, rights management, and playability on various devices, have not yet been reported.

Via: BusinessWeek

Explore further: A Closer Look: Your (online) life after death

add to favorites email to friend print save as pdf

Related Stories

Stolen photos of stars find 'safe harbor' online

Sep 04, 2014

Imagine what the Internet would be like if most major websites had imposed controls preventing the naked photos stolen from Oscar-winning actress Jennifer Lawrence and other celebrities from being posted ...

Study shows consumers willing to pay for online news

Aug 05, 2014

A Victoria University of Wellington student is exploring ways to fund quality journalism online, including developing a tool that allows people to purchase an online package of news from several publishers.

Who are the music pirates and what do they want?

Aug 05, 2014

Music piracy is a huge problem, if the music industry is to believed. But so far, very little has been done to stop it. We are, however, starting to get an idea of what motivates people to do it. If record ...

Monkeys also believe in winning streaks, study shows

Jun 27, 2014

Humans have a well-documented tendency to see winning and losing streaks in situations that, in fact, are random. But scientists disagree about whether the "hot-hand bias" is a cultural artifact picked up ...

Recommended for you

A Closer Look: Your (online) life after death

11 hours ago

Sure, you have a lot to do today—laundry, bills, dinner—but it's never too early to start planning for your digital afterlife, the fate of your numerous online accounts once you shed this mortal coil.

Web filter lifts block on gay sites

11 hours ago

A popular online safe-search filter is ending its practice of blocking links to mainstream gay and lesbian advocacy groups for users hoping to avoid obscene sites.

Protecting infrastructure with smarter CPS

18 hours ago

Security of IT networks is continually being improved to protect against malicious hackers. Yet when IT networks interface with infrastructures such as water and electric systems to provide monitoring and control capabilities, ...

Apple helps iTunes users delete free U2 album

Sep 15, 2014

Apple on Monday began helping people boot U2 off their iTunes accounts after a cacophony of complaints about not wanting the automatically downloaded free album by the Irish rock band.

Habitual Facebook users: Suckers for social media scams?

Sep 15, 2014

A new study finds that habitual use of Facebook makes individuals susceptible to social media phishing attacks by criminals, likely because they automatically respond to requests without considering how they are connected ...

YouTube to go offline in India on Android phones

Sep 15, 2014

YouTube users in India will soon be able to save videos from the Google-owned service, making it possible to watch them offline, and the feature will eventually be available globally, the company said Monday.

User comments : 0