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Opinions on MS, UMG Deal

I am unimpressed by what I am reading about the Zune, really. Scanning through Engadget’s very comprehensive story on installing the Zune companion software, well, I don’t think Apple has much to worry about in the immediate future.

There has been a lot more interesting speculation about the Microsoft, Universal licensing deal where the Redmond giant has agree to shell out a nominal license fee per hardware unit. A concession most of the labels would dearly love to extract from Apple. But the only point on which Jon Gruber and Ed Felten agree is that unlike Apple, Microsoft is in a weak market position when it comes to music licensing. They have to take what they can get, like anyone else who does not have nine tenths market share.

Beyond that, Gruber thinks Microsoft is trying to poison the well. He worries that the hardware royalty will eventually spoil the whole market as labels continue to pursue what they no doubt feel is essentially a piracy tax. He thinks this will eventually include Apple, despite their dominant market position.

Ed Felten disagrees on that point and is largely unconcerned. I’m solidly the fence, though I am leaning heavily towards Felten’s view. Apple has not been afraid to tell the labels, “no”, when it is in their best interest to do so. Giving up hardware royalties would immediately affect their bottom line, no if’s, and’s or but’s. However, I hate making prediction as the universe is inherently unpredictable, so I’ll concede that is possible if perhaps unlikely that Microsoft and Universal are laying the groundwork for a shift in some future balance of power negotiation between Apple and the labels.

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The Command Line by Thomas Gideon
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