Zune Thoughts: What Microsoft Thinks of the Universal Deal

"Today we're announcing that we'll pay UMG a per device royalty for every Zune player sold – a first in the industry. Why? We're about supporting artists, and ensure they continue to prosper with the emergence of the digital music model. The distribution of digital music isn't that old, and the current method isn't really doing a lot to compensate artists fairly. We worked closely with Universal to create this revenue opportunity for artists, as the industry transitions to a time when it can fully take advantage of new opportunities that digital experiences offer, both for consumers and for artists and labels."

There were more than a few eyebrows raised yesterday when it was revealed that Universal would be getting a cut of Zune sales. Unfortunately, Microsoft and Universal couldn't talk specifics, but the former did raise a couple of points today that I thought were worth sharing. Firstly, a portion of the cut goes to Universal's artists. Now who the artists are and how much of that cut they get is still a question mark. We did say they couldn't talk specifics, right? ;-) Secondly, Microsoft is talking to other labels (indies and majors) about the opportunity to participate in a similar manner. Yes, we'll give you a minute to get your head around that one. It's a "power to the labels" approach that not everyone is going to want to embrace. The upside of all this is that there'll be more tracks pre-loaded on the Zune than first announced, and there'll be more tracks available for purchase in the Marketplace (yay to choice). The downside is that over time, the strong-arm tactics of the labels is only going to worsen (nay to money-grubbing). They'll make money off the songs. They'll make money off the hardware. Soon, it'll be your clothes, and your soul.