Universal Says Will Market Music To iTunes “At Will”

07.02.07 - 03:32pm

Universal and Steve Jobs have never been the best of friends as arguing over the price of digital music downloads has become one long drawn out fight. Now, tensions appear to be heating as Universal has refused to renew their two-year contract with Apple’s iTunes instead opting for a month to month contract saying they will only market the music to Apple “at will.”

This gives Universal some extra power in any negotiations because should they choose to pull their music it would be the equivalent of 1 of every 3 hit songs no longer being available on iTunes.

With so much new competition in the digital music store market, Universal may be looking for a company that is willing to go with the higher prices Universal wants and they may also want to keep DRM attached.

Apple has had a great monopoly over the digital music market accounting for 76 percent of digital download sales. To lose a company like Universal thus suddenly limiting iTunes songs could be quite a blow to the company.

At the moment though Apple’s iTunes accounts for 15 percent of Universals overall revenue or 200 million dollars, thus it would seem foolhardy of them to pull the music. Still if another digital download store starts to equate power in the digital market and Universal signs exclusively with them it would most definitely hurt Apple and could have the power to propel another digital music store forward.

Category: itunes | Tags: apple, digital_music, itunes, monopoly, music_downloads, steve_jobs, universal