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Universal CEO Morris wants iPod royalty fee from Apple
Tuesday, November 28, 2006 - 04:40 PM EST

"Universal Music Group Chief Executive Doug Morris said on Tuesday he may try to fashion an iPod royalty fee with Apple Computer Inc. in the next round of negotiations in early 2007," Reuters reports.

"Universal... was the first major record label to strike an agreement with Microsoft Corp. to receive a fee for every Zune digital media player sold," Reuters reports.

"'It would be a nice idea. We have a negotiation coming up not too far. I don't see why we wouldn't do that... but maybe not in the same way,' he told the Reuters Media Summit," Reuters reports.

Full article here.

MacDailyNews Take: Morris can seek, but he shall not find. Maybe by the end of 2007, the leech will be able to buy a sandwich with all of his accumulated Zune royalties. Steve Jobs holds cards that Microsoft can only dream of holding.

As we wrote on November 9: We've been saying for quite awhile that Microsoft seems to want the Zune to fail; the choice brown, the muddled business plan, the crippled Wi-Fi, the hobbled DRM-laden "sharing", the weak advertising, the fake scroll-wheel, the "uncoolness" of Microsoft, the lack of a compelling price advantage, the lack of video content, etc. But, we couldn't figure out why Microsoft seems to want the Zune to fail. We thought maybe they needed a tax write-off or they were just mismanaged and/or deluded. But, maybe their "plan" is to set a precedent for the next round of iTunes Store negotiations? Perhaps Microsoft hopes to hurt Apple by trying to force this weird profit sharing on iPods? To share hardware profits with the music labels makes no sense. Did phonograph makers share record player profits with music labels? No. Did Sony share Walkman profits with music labels? No. Do AM/FM radio makers share profits with music labels? No. Do TV makers share profits with TV networks and producers? No.

As we wrote on November 10: As far as Universal demanding the same ludicrous royalty scheme from Apple Computer Inc. to which Microsoft capitulated with Zune: Universal needs Apple a helluva lot more than Apple needs Universal. If Universal doesn't want to sell music to what will then be in excess of 100 million iPods sold via what will then be a U.S. top five music outlet, Apple's iTunes Store, then Universal can go pound sand. If Universal makes such a bad decision, they'll be crawling back to Steve Jobs on their hands and knees within weeks begging for forgiveness. If they want to play hardball with Steve Jobs based on a deal they made with the sleazebag Redmond Zunatics, they should understand that a Jobs fastball thrown straight to the head will sideline them not just from that game, but from many games to come.

Contact Universal Music Group:

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Related articles:
Microsoft’s Zune selling like snotcakes - November 15, 2006
Universal Music Group CEO calls iPod users thieves - November 11, 2006
Following Zune deal, Universal expected to demand iPod royalties from Apple - November 10, 2006
Microsoft to pay Universal for every Zune sold - November 09, 2006

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Nov 28, 06 - 04:45 pm Comment from: Buster

What a miserable parasite trying to suck the life blood out of Job's creation. I hope Steve makes an example with him and at this point, Steve is powerful enough to do it.

Is this guy stupid or what?

Nov 28, 06 - 04:46 pm Comment from: NeverFade

Does Universal get some money from every Sony stereo sold, that plays Universal CD's?

Way to negotiate MS! F'n idiots....

Nov 28, 06 - 04:46 pm Comment from: Gavron

Stupidity often accompanies greed.

Nov 28, 06 - 04:46 pm Comment from: Buster

My oh my...and first post too...not that it means...anything.....much.

Nov 28, 06 - 04:46 pm Comment from: Akido

When the record labels get a cut of every record player, CD player, cassette deck, etc sold, THEN they can talk to Apple about royalties.

They forced Microsoft into a bad deal, because M$ was desperate to look like they could compete with iPod+iTunes.

Nov 28, 06 - 04:48 pm Comment from: pieterdebecker

Universal greedy … !!!

I paid for all the songs on my iPods, what else do you want?

Do you think I get paid for every illustration I made each time it is used?

I want royalties for every blank sheet of paper! NOT

Nov 28, 06 - 04:50 pm Comment from: Driver

What next, are the States going to ask the Car manufacturers for a handout every time a car rolls off the assembly line because it may or may not drive on a highway.

MS did what they wanted, they threw a spoiler in there, just to fu@k with the model... If they get away with it we are all screwed on other stuff we use.

Nov 28, 06 - 04:52 pm Comment from: iWant

I'd like a villa in Tuscany, a beach house in Kauai, a few Ferraris, couple nice thoroughbreds, one or two of those wine cellars with the amazing vaulted ceilings, a staff of 12...

maybe I'll put that into my next compensation negotiation.

Nov 28, 06 - 04:55 pm Comment from: EvangelizeWithRespect

Comment just filed at Universal Music's contact page:

"I just read about your CEO's unconscionable attempt to force Apple to pay Universal a royalty for every iPod sold. If Doug Morris goes ahead with this plan, I will boycott every Universal CD, DVD, movie and theme park from that point forward, and I will urge everyone I know to do likewise. It's bad enough that your CEO believes most of the music on an MP3 player is stolen when surveys have clearly shown that that's not the case (my own iPod is full of songs copied from the CDs that I've purchased over the years and, more frequently lately, tracks purchased and downloaded from iTunes). But to call on a device manufacturer to pay money for every device sold, after having paid money to Universal for every track sold, will further sour your supposed customers on the greed of your company and its leadership, and encourage them to pirate their music rather than acquire it legally. Hey, if they're paying for it anyways through an iPod surcharge, why not?"

Here's the form:

http://www.universalstudios.com/homepage/html/contact_us/contact_form.cgi

...though you may need to start here:

http://www.universalstudios.com/homepage/html/contact_us/

Nov 28, 06 - 05:00 pm Comment from: Occam’s Razor

What are the odds on 100 million pods by the end of the year? And when is the 2 billion tune?

Nov 28, 06 - 05:05 pm Comment from: Zillatron

Universal CEO Doug Morris, obviously an idiot.

Z

Nov 28, 06 - 05:05 pm Comment from: AshNazg

What a load of garbage. I tend to believe Microsoft entered into the deal with Universal JUST to get Universal to go after Apple. Microoft has deep pockets (for now, anyway) and knows they can afford to pay Universal a few bucks... But Microsoft also knew if they didn't agree to pay Universal, Universal would probably not go after Apple...

Microsoft is like one of those knats that keeps flying in your face even afer you swat it away...

Nov 28, 06 - 05:05 pm Comment from: macromancer

In other news:

Hamburger patty companies will soon ask for royalties from the makers of hamburger buns
Car manufacturers will ask for royalties from tire manufacturers.
Window companies will ask for royalties from window cleaner companies.
Toothbrush companies will ask toothpaste manufacturers for a royalty.

and Doug Morris needs more hookers and blow.

two words for ya Dougie:
POUND
SALT

Nov 28, 06 - 05:11 pm Comment from: Gwendo

Let's give him 2 Cents…

Nov 28, 06 - 05:12 pm Comment from: R

Just remember that karma can be a bitch, Doug...

Nov 28, 06 - 05:13 pm Comment from: Jimbo von Winskinheimer

I will begin charging Universal a fee of 10 cents each time I play one of their songs on my iPod. Thanks, Universal.

Nov 28, 06 - 05:14 pm Comment from: JDH

"The Zune (deal) was an amazingly interesting exercise, to end up with a piece of technology," he added.



Piece of something......yes.

Nov 28, 06 - 05:14 pm Comment from: Freddy the Pig

The day I am forced to pay a record company a royalty on a new iPod purchase is the day I start my torrent downloads 24/7. Nevermind I have all the music I want already. Nevermind the fact that the drivel passed off as music by the Major Labels today is pure shit. Just nevermind. If they stick me because I'm a thief, you can bet I'll go out and be a thief.

Nov 28, 06 - 05:14 pm Comment from: Viktor

JA! JA!
THAT'S ALL I HAVE FOR UNIVERSAL.

Nov 28, 06 - 05:17 pm Comment from: BuriedCaesar

It's like if the car manufacturers started installing a cardswipe and requiring you to use your debit card to unlock the door every time you wanted to go for a drive.

Or the commercials you may have seen where someone has to use an ATM to get to their bananas or cheese in the fridge. Or open their closet to get to that favorite shirt.

Just have two words for Morris:

NE VER

Nov 28, 06 - 05:24 pm Comment from: KillBill

Why the freak should we pay extorsion fees to Universal becasue my neighbor might have ripped a CD of a Universal artist...

All record companies should be made to pay royalties to users and creators for the privlege of presenting other people's work.

All of the songs on my iPod come from the iTunes store and from about 25 cds that I actually own. Really this guy is pure jerk.

Maybe he should record his flatulence, release it in about 200,000 variations then demand royalties from all users who have an ass becase they might have similar sounding faltulence.

Nov 28, 06 - 05:29 pm Comment from: computers, too

Maybe Dell, HP, Sony, etc. should start giving Universal a dollar for every computer they sell.

Don't people use those computers to rip CDs and download from P2P sites?

Nov 28, 06 - 05:29 pm Comment from: Huh?

How many dollars does Universal receive from sales of CDs and other sources excluding online digital sales?

How many dollars does Universal receive from sales of music from iTunes?

How many dollars does Universal receive from sales of music from Zune Marketplace excluding the extortion fee paid by Microsoft?

How many dollars does Universal receive from the extortion fee paid by Microsoft?

How many dollars does Apple receive from the sale of Universal music from iTunes.

How many dollars does Microsoft receive from the sale of Universal music from Zune Marketplace after paying the extortion fee to Universal?

What losses will Apple accrue in actual dollars and percent of net profit if Apple refuses to pay the extortion fee and loses access to Universal?

What losses will Universal accrue in actual dollars and percent of net profit if Universal continues to provide music under the same conditions that currently exist with Apple’s iTunes?

I would like to see some verifiable numbers of profit and loss. I want to see pain and pleasure quantified in greenbacks.

Nov 28, 06 - 05:31 pm Comment from: mudflapper

Hey Universal,

K I S S M Y A S S.

m

Nov 28, 06 - 05:35 pm Comment from: tt

The end of that phonecall went something like this:

"HAHAHAHAHAHAHAHAHA..... {click}"

Nov 28, 06 - 05:36 pm Comment from: January 24, 1984

Ah, the high olfactory note of anxiety. It smells like greasy, even rancid tuna.

It's instructive to not only watch, but to participate in the death of an anachronistic, and increasingly un-needed infrastructure. Soon, self-publishing entites will develop Gonzo Marketing techniques to reach a critical mass of consumers, and then the real slide will begin.

How many people must you attract to fund a band? 10,000....100,000. Somewhere in that order of magnitude. I started a company 5 years ago, and now have over 300,000 hits annually.

It's enough to create a sustained, healthy cashflow. I live in SoCal, and many of the local bands are working real hard on self-marketing. Video-intensive websites with DVD promotions, and live music calendars.

It's the beginning of the end for the majors.

Nov 28, 06 - 05:42 pm Comment from: dt

How greedy can one company get? They already get royalties when we buy CD's at the store and songs online in the first place. Paying royalties for each iPod on top of that is double-dipping! What's next? Making the RAM manufacturers pay royalties because the songs get stored there temporarily when we load up a song in iTunes?

Nov 28, 06 - 05:43 pm Comment from: LemmeKnow

Just let me know how much I am paying to Universal when I buy my iPod so I can, with a clean conscious, copy that much worth of songs I like from my friends. If I am paying for them I am going to listen to them.

What a bunch of CRAP! Greedy, Greedy GREEDY!!!

Nov 28, 06 - 05:45 pm Comment from: Figurative

Gee maybe all the auto companies should levy a surcharge to all because some people engage in vehicular homicide?

Or how about charging every home buyer a 1% surcharge because usually when a murder is committed it takes place in a house?

All this nonsense started with the anti-gun lobby wanting additional fees and taxes from all gun buyers.

Nov 28, 06 - 05:46 pm Comment from: digitddog

So, if I pay a royalty to Universal when I buy an iPod, am I at liberty to load Universal content for free?

Nov 28, 06 - 05:49 pm Comment from: john

mad I think Steve Jobs answer will be a flat out NO! Mr. Morris. Have a nice day. grin

Nov 28, 06 - 06:01 pm Comment from: TowerTone

So now we know why Microsoft is willing to lose millions on the Zune.
It was all just to throw a proverbial wrench in Apple's machine.
They can pat themselves on the back now, this was their only success.

Nov 28, 06 - 06:09 pm Comment from: DudeMac

I don't see how Universal can charge Apple a royalty for every iPod sold; I mean especially if an iPod owner doesn't buy one song from any Universal music artist.

Nov 28, 06 - 06:12 pm Comment from: ChrissyOne

I wuld just LOVE to know how much Uni has made of their Zune deal by now. 2 weeks after launch, with Black Friday behind us, how many Zunes do you think are out there? 10,000? Ha! That's laughable. I wish some mole at MS would fill us in.
Oh, the MS campus shut down today because of the snow that dumped on us. Now's our chance to TP the building. Who's with me?

-c

MW: 'found' (the Zune to be a very useful and attractive hammer)

Nov 28, 06 - 06:18 pm Comment from: Macaday

PERFECT!

When he's made to eat dirt by Steve Jobs it will make Steve Ballmer and look even more foolish than they already do.

Nov 28, 06 - 06:24 pm Comment from: huh?

I don't even have an iPod, so I guess I'm off the hook - despite all the songs on my hard drive... heh, heh. What a dork! Dream on! Hell, an iPod can only play the songs, my computer can download them (paid or not) and rip them to an infinite number of cds. Let's see Universal go after all computers and get some kind of private tax on them. Good friggin' luck!

MS magic word: "living" as, Universal is living in a fantasy world!

Nov 28, 06 - 06:28 pm Comment from: Musicians Lose

You know who will lose if this greedy shite stain on the music industry decides to holdout for some undeserved royalty? THE MUSICIANS LOSE.

Everyday Universal is out of the iTunes store the artists lose.

Universal can't get their other shit together so they better look in every corner to see if there's a quarter or some blood money they can suck from someone who's innovating.

Those French Fu&#xks; have turned Universal into a bland and uninspiring brand during their tenure. Here's wishing they lose a butt load this holiday season.

Ptthhh. I fart in your general direction!

Nov 28, 06 - 06:38 pm Comment from: leodavinci

Universal can seek an iPod royalty all it wants. Getting one is something else.

It will be interesting to see the end results of the next round of label negotiations.

MDN word ask. As in: Ask and you shall receive. Or maybe not, if you're Universal.

Nov 28, 06 - 06:39 pm Comment from: Mike

Exactly who the fsck does this guy think he is?

Nov 28, 06 - 06:47 pm Comment from: DogGone

iTS will probably sell 2B songs around March next year assuming the rate of 1B per year (as of Sept 06). Hopefully the DL rate will be increasing and Apple can announce 2B at MWSF

Nov 28, 06 - 06:49 pm Comment from: blucaso

I am going to petition my Representatives to initiate a bill to tax Universal $1 for every child born with ears, as without ears, Universal's music would have no market. It's only fair they should pay in advance for access to the hearing market.

Nov 28, 06 - 06:49 pm Comment from: DW

"Steve Jobs holds cards that Microsoft can only dream of holding."

Worst case scenario: The labels band together against Apple. I wouldn't doubt that they would do something so sleazy. I don't know anything about Microsoft, but I can guarantee that Steve Jobs is in no position to try to fight if the Industry teams up that way.

I would hope Jobs wouldn't cave to just one label, though. But, like they said with the Zune deal, more labels are looking into it... which just plain sucks.

Nov 28, 06 - 06:50 pm Comment from: Snakeyes

Microsoft was needy and Mr. Morris is greedy. Fsck 'em both where they breathe.

Nov 28, 06 - 06:51 pm Comment from: Tubes

Also, don't forget that most music sold is NOT sold via iTunes, but rather on CD.

Most iPod owners don't buy a tremendous amount of songs.

Nov 28, 06 - 07:02 pm Comment from: MacRaven

So Universal gets a cut of every Zune sold.....did they reach $10 yet?

Doug Morris ponders which local Dollar Store to squander his profit in. If he smart, he'll save it toward his very OWN ZUNE! Then he and Ballmer can take turns squirting each other all day.

Nov 28, 06 - 07:09 pm Comment from: Bring it on

If this deal goes down the way Universal wants, it will be an authorization for everyone to download freely. Since they have already paid for it. On your marks!!

Record industry is dead.

Nov 28, 06 - 07:16 pm Comment from: mark

DW, if the labels collude to force Apple to concede, you can bet that the State of NY will be all over them. Eliot Spitzer is now governor but the NY Attorney General continues to have the labels in his sights.

No doubt the other 49 states will get in line for some easy money from the labels too.

Nov 28, 06 - 07:38 pm Comment from: isteve

So does this mean that all future media from universal will be free on my ipod. I mean if you pay them upfront because you may listen to there stuff how can they charge you again.

Nov 28, 06 - 07:57 pm Comment from: mOBSCENE

Gees...

Perhaps the Gas Producing Companies should receive a royalty for every car sold too. Wow... Sky is the limit on this one.

A move STEVE MUST SQUASH

Nov 28, 06 - 08:02 pm Comment from: thefireguy

I've said it once and I'll say it again - leave it to the M$ folks to mess up a great market!

I guess MS$ feels that if they can't play in someone sandbox then no one can - the world would be a much better place without the likes of M$!

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