Hypebot’s New Music Business Briefing For Friday November 10th, 2006

> Neither side is giving details of Universal’s deal to recieve a percentage of Zune sales. (AP) Click after the jump below for the text of Microsoft’s offical announcement.  Microsoft is also negotiating with other major labels, but will indies be included? And how will the monies be shared with revenue holders?

> Meanwhile more and more tech writers are giving Zune mixed reviews.  (WSJ) We should have our hands on one early next week and will review it from both a consumer and industry perspective.

> Just in case you weren’t sure if the suits were in charge yet… MySpace grabbed the URL from the indie band Bones without telling them and gave it to the Fox TV show by the same name. (MI2N)

> A dozen major organizations including The Consumer Electronics Association and The Electronic Frontier Foundation have formed the coalition Digital Freedom "dedicated to defending the rights of artists, innovators, creators and consumers to use technology without fear of unreasonable government restrictions or costly lawsuits." (Digital Freedom)

> Talk about the Long Tail: Underground Classical. "There are opera nights at a Lower East Side dive bar, chamber music concerts at a boxing gym beneath the Brooklyn Bridge, contemporary music at a cabaret in Williamsburg, Brooklyn, and avant-garde fare in a silo on the banks of an industrial canal."  (Musical America)

> Later today: Part II of our look inside the J Records digital marketing department and this weekend look for more from the Billboard Talent & Touring Conference.

New York, New York, November 9, 2006:..Microsoft Corporation (Nasdaq: MSFT) and Universal Music Group, the world’s leading music company, announced today an agreement which creates a groundbreaking, new revenue stream for UMG and its artists: in addition to the standard payments it will make to UMG for the sale of its music, Microsoft will also pay UMG a portion of Zune device sales. Microsoft plans to offer a similar arrangement to other music labels and their artists.

"This agreement with Microsoft around Zune is a significant milestone for our company and our artists," stated Doug Morris, Chairman and CEO, Universal Music Group. "This move demonstrates there can be a win-win situation where consumers have a great experience while labels and artists are also fairly compensated. We applaud Microsoft for its innovative and consumer-friendly Zune store and device."

"At a time of transition for the music industry, Zune aims to be a leader in supporting artists and enabling the creative possibilities associated with connected entertainment. We look forward to working with the industry to make sure labels and the artists have a very bright future," said Bryan Lee, Corporate VP Microsoft Entertainment & Devices. "We believe that the music consumer will appreciate knowing that when they buy a Zune device, they are helping to support their favorite artists."

The Zune device and online store launches next week on Tuesday, November 14 and will include content from all major and independent music labels including UMG’s extensive library of musical content from its world-renowned roster of chart-topping artists.

About Universal Music Group

Universal Music Group is the world’s largest music company with wholly owned record operations or licensees in 75 countries. Its businesses also include Universal Music Publishing Group, one of the industry’s largest global music publishing operations.

Universal Music Group consists of record labels Decca Music Group, Deutsche Grammophon, Interscope Geffen A&M Records, Geffen Records, Island Def Jam Music Group, Lost Highway Records, Machete Music, MCA Nashville, Mercury Nashville, Mercury Records, Philips, Polydor Records, Universal Music Latino, Universal Motown Records Group, and Verve Music Group as well as a multitude of record labels owned or distributed by its record company subsidiaries around the world. The Universal Music Group owns the most extensive catalog of music in the industry, which is marketed through two distinct divisions, Universal Music Enterprises (in the U.S.) and Universal Strategic Marketing (outside the U.S.). Universal Music Group also includes eLabs, a new media and technologies division, and Universal Music Mobile.

Universal Music Group is a unit of Vivendi, a global media and communications company.

About Zune

Zune is Microsoft’s music and entertainment platform that provides an end-to-end solution for Connected Entertainment. The Zune experience includes a 30GB digital media player, the Zune Marketplace music service, and a foundation for an online community that will enable music fans to discover new music. Inspired by the vast and varied community of music fans, Zune focuses on helping emerging artists shape the digital canvas. Zune is part of Microsoft’s Entertainment and Devices division and supports the company’s software-based services vision to help drive innovation in the digital entertainment space. More information can be found online at http://www.microsoft.com/presspass/presskits/zune.

About Microsoft

Founded in 1975, Microsoft (Nasdaq "MSFT") is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

Note to editors: If you are interested in viewing additional information on Microsoft, please visit the Microsoft Web page at http://www.microsoft.com/presspass on Microsoft’s corporate information pages. Web links, telephone numbers and titles were correct at time of publication, but may since have changed. For additional assistance, journalists and analysts may contact Microsoft’s Rapid Response Team or other appropriate contacts listed at http://www.microsoft.com/presspass/contactpr.mspx.