Microsoft and Music Labels Talks Break Down
By Thomas Hawk |
October 4th, 2005
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The Wall Street Journal is reporting today that talks between Microsoft and the four major record labels — EMI Group, Warner Music, Vivendi’s Universal Music Group, and Sony BMG — regarding a subscription music service have broken down.
WebProNews says: In the report, the Journal cites several sources familiar with the talks as noting the royalty fees became a problem. Microsoft sees the monthly rate of $6 to $8 per user as being excessive, but those sources say the rates would be roughly what other subscription-based services pay.
To enter the competition, Microsoft would probably have to price a service around what Yahoo charges for its Yahoo Music Unlimited product. Yahoo makes money from selling advertising on its music service. Apple earns profits from its trendy iPod music players and has refused to license the DRM scheme used on iTunes, forcing users to buy iPods for easy song portability.
Microsoft doesn’t seem willing to back down from its position and subsidize a music service with profits from another sector, like its digital rights management software. Perhaps after the full launch of its advertising network it may revisit the issue and try a solution similar to that used by Yahoo.
Personally I’ve never been a fan of the subscription music services. I’d much prefer the control over my own music library.
Filed in: Content Providers