Redmond (WA) - A deal struck by Microsoft and Universal Music Group gives the popular record label a cut of the sales of Microsoft's anticipated Zune media device, in a move that is possibly more about potential legal action than it is a good faith partnership.
According to the Associated Press, a set percentage of the revenue from every $250 Zune sold will go to Universal, effective immediately upon the device's November 14 launch. The deal was reportedly struck as a result of Universal's disapproval of the Zune's wireless sharing feature, which allows users to download songs from other Zune devices within a short range, without paying for them.
Despite Universal Music's CEO Doug Morris's comments denying it, it is believed that that specific feature of the Zune caused the company to seek a revenue-sharing agreement. Morris, however, hinted to the fact that Zune can play content that could possibly be obtained illegally, which is also the case with virtually every other MP3 player.
"The only factor was that we feel that there's a great deal of music that's (stored) on these devices that was never legitimately obtained, and we wanted to get some sort of compensation for what we thought we're losing," he said. As part of the plan, an unspecified portion of Universal's share in Zune sales will be paid directly to its roster of artists.
Universal Music Group, which is known for being prolific with threats and follow-through of legal action for music piracy, is one of the biggest record labels in the world, with clients from Eminem to Andrea Bocelli. Microsoft needed to ink out some kind of deal with them, because otherwise its Zune Marketplace music store would have missed out on over a thousand songs from Universal's contracted artists.
Previously, Universal Music Group has reportedly threatened legal action against YouTube and MySpace for allowing users to post songs and music videos to which it owns the copyright, without getting compensated.
Universal was also involved in a multi-plaintiff suit against Sirius for its portable S50 satellite radio, which allows users to download and store songs to an internal hard drive. The resolution called for multiple record companies to get a cut of every S50 sold, much like the deal being formed with the Zune, this time on a preemptive basis. Microsoft is reportedly working on similar deals with other record companies.