Zune Thoughts: Did Karma Bite Microsoft?

"There’s an interesting echo here from Microsoft’s antitrust history. Once upon a time, Microsoft insisted that PC makers pay it a royalty for every PC they sold, whether or not that PC came with Windows. This was called a per-processor license. PC makers, in a weak bargaining position, went along. Microsoft said this was only fair, claiming that most non-Windows PCs ended up with pirated copies of Windows."

There has been much controversy, and rightfully so, surrounding last week's announcement that Microsoft has reached an agreement to pay Universal Music Group a royalty for each Zune player it sells. (In case you've been living under a rock, yes, that is a royalty for each player, not song!) Speculate all you want about the reasoning behind this agreement, but as I see it, it boils down to one thing. Universal strong-arming Microsoft because UMG feels it should be compensated for the potential pirating that Zune users might do. The folks over at Freedom to Tinker pointed out something quite interesting. Maybe this deal is just an example of karma coming around and biting MS on the rear. It seems that back in the day, Microsoft enforced what was referred to as a "per-processor license". Microsoft apparently forced PC manufactures to pay a fee on every PC sold, even if that PC did not have Windows installed! Microsoft reasoned that most PCs would end up with an illegal copy of Windows, so they might as well get their money up front. Sounds eerily familiar, doesn't it? Of course, as usual, we the consumer are the big losers here.