With less than a week to go before Bill Gates drops the shiny new turd known as the Zune, Microsoft has announced a last-minute bargain with Universal Music, one that reeks of mutual desperation:
In a first-of-its-kind deal sure to cause headaches for Steve Jobs in the future, Microsoft has agreed to give Universal Music a cut of the revenue from sales of its Zune digital music player, which goes on sale next week….Coin from Zune hardware sales will come on top of royalties labels make from individual song downloads in the Zune musicstore, which is launching along with the player.
While other labels had already agreed to provide their music to Zune’s store, UMG was a last minute holdout. CEO Doug Morris, who has also played hardball to get revenue from musicvideos on Web sites like Yahoo! and YouTube, is said to have insisted on additional compensation from Microsoft.
So Zune’s store gets access to Universal artists–which, judging by Microsoft’s love of all things indie, it’s gonna need–and Morris gets to brag at his next power lunch about how he roped in them lawless Internet-music varmints. If this works out, expect Morris and his buddies to once again put pressure on Apple for a better pricing deal; and if that works out, expect Morris to develop a time-travel device that will allow him to go back to 1984 and force a $2 tax on boombox sales.
Zune singing labels’ tune [Variety]