Universal Music Prepares to Shoot Itself in the Foot It Has Inserted in the Mouth of the iTunes Gift Horse

Setting itself up for a beautiful pratfall, Universal Music has decided not to renew its long-term iTunes contract. This move by itself is no big deal, as Universal albums will still be available for the time being. It does leave Universal free, however, to pull its catalog at any time. The idea would be to ink a deal with another online music store on more generous terms, breaking the monotony of 99-cent pricing and somehow giving Universal more control over things.

Universal is the first major label to consider jumping from the iTunes ship this seriously, but it’s hardly alone in contemplating the move. The majors have been upset with Apple’s hegemony in the online music market, and they hate hate hate being forced to do business on Apple’s terms. As Apple’s market position grows, they fear losing what little leverage they possess. Understandably, they’re looking around the dancehall for better partners. Unfortunately for the majors, but fortunately for the rest of us, there’s a very good reason why they’re getting pushed around by Apple.

It’s all about the brands, not the bands. Recording labels have cruddy brands. Think of your favorite musician. What label are his or her albums recorded on? Which company owns the rights to that music? Pretty much the only times you even hear about what record label an artist is with are when they first get signed to the label, and then later when they start feuding with the label.

If all Universal music disappeared from iTunes tomorrow, what songs would be missing? The consuming public has almost no idea. That those songs could no longer be found would be annoying to them, but very few people indeed would link up the disappearance with Universal’s snit fit. (This sword has two edges; I have no idea which EMI music on iTunes is available for DRM-free download, either.) So sure, Universal could flee the party in tears. But the iTunes party would go on, much as it has.

And how many people do you think would sign up for a new music service, with a new payment model and a new DRM system, just so they could get their hands on Universal Music tracks? The very name is a cruel joke. A major label striking out on its own is liable to find out how un-major it is in the scheme of things. Now, if the majors all struck out together, now that might be a crippling blow to iTunes. But it’d also be an open-and-shut antitrust violation. I’d say that would be a deterrent, but thuggery and cartelization are nothing new in the recording industry.

Bring it on, Universal. The sooner you destroy yourself, the better for us all.

Thanks for your input on the Universal Music situation. Just to let you know - we’ve quoted you throughout our coverage on SPIN.com. Feel free to check it out: http://www.spin.com/features/everybodystalkingabout/2007/07/070702_universal/

Great article. I think you’re right on the ‘money.’ It’s as if record companies can’t afford the change that has to come.