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Apple Loses Contract With Universal Music

Universal Music, one of the “big 4″ RIAA music labels, has declined to renew its contract with Apple’s iTunes Music Store. While Universal’s music will not be leaving iTunes, the lack of a contract means Universal isn’t bound by anything to continue offering anything to iTunes, and can try to strong-arm Apple into things that wouldn’t be allowed by the prior agreement. Universal could yank its entire catalog from iTunes, or make demands with that as a threat, like demanding a price increase, different track bundles, pretty much anything.

It would seem like iTunes and other digital music stores are trapped, subject to demands from the music industry, but that isn’t necessarilly the case. iTunes is one of the largest sellers of music these days, digital or offline, and that means the record labels would be losing a lot of sales if they lost iTunes as a distributor. Universal can no more risk losing Apple than they can losing Best Buy, although they may try to pull a few concessions from Apple in the future.

July 2nd, 2007 Posted by Nathan Weinberg | Apple, General | no comments

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