Major Labels

Doug’s Universal Toll Booth Collects From XM

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Universal Music Group has settled a lawsuit against XM over a player that records XM programming by extracting a per unit fee from the satellite radio service similar to the per unit charge it gets from every Zune sold.

DEALS WITH DOUG –

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Never one to be daunted by falling sales, Universal’s Doug Morris seems determined to shore up  his eroding bottom line with payments from others who profit from their association with music.

Internet radio and satellite broadcasters are being asked to pay more by all the labels. Devices manufacturers from Microsoft to Nokia are cutting special revenue sharing deals with Universal as are services like YouTube. Then there’s Morris’s broader initiative to have all device manufacturers pay Universal and the other major labels for a "Total Music" subscription built into each player sold.  Sounds interesting, but the devil is usually in the details and thus far Morris has not provided any.

EXTRA CREDIT: "Universal Bans Song Streams, Cuts Nokia Free Music Deal. WILL THE REAL DOUG MORRIS PLEASE STAND UP?"

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2 Comments

  1. can’t agree with you on this one… how does XM have the right to give away copies of other’s music to anyone? this practice by XM is blatantly illegal, and i hope other lawsuits will follow…

  2. I agree with the above comment. XM has more than an “association with music,” as you put it. It has a portable device that makes digital copies of songs its broadcasts. It offers an added-value service to its customers but was not paying the content owners for that added value. That’s wrong. XM said it did not need a different license for this service, but I think it would have lost in court.
    Morris would be doing a disservice to his labels, artists and his competitors if he let XM do as it pleased. The marketplace is full of companies trying to come up with clever rationales for evading payment to labels. It might be worthwhile to let random websites skirt their responsibilities, but XM’s behavior could not be overlooked.
    UMG’s message is clear, and it is the correct message. It will not listen to any arguments about the promotional value of radio. It will not hope people hear its artists on the radio and then go out and buy a track or album. If you use UMG’s music, you’re going to pay for it. Period. No free lunches. When sales were good, obviously these issues could be overlooked. You may consider it to be rooted in desperation, but UMG is doing the right thing — regardless of motive.

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