[A2k] Universal Music Takes on iTunes - flat fee?

[Andrea Glorioso]

http://www.businessweek.com/magazine/content/07_43/b4055048.htm

Universal Music Takes on iTunes
Universal chief Doug Morris is enlisting other big music players for a
service to challenge the Jobs juggernaut

Relationships in the entertainment world can be famously fraught. And
few are more so these days than the one between Steve Jobs and
Universal Music chief Doug Morris. You may recall that Morris recently
refused to re-up a multi-year contract to put his company's music on
Apple's iTunes Music Store. That's because Jobs wouldn't ease his
stringent terms, which limit how record companies can market their
music.

[...]

This isn't only about Jobs; Morris badly needs to boost his business,
and Apple is the one to beat. The iTunes store has grabbed about 70%
of downloads in the U.S. And the iPod--well, what's left to say about
that juggernaut? Plus, music companies have been here before. A few
years ago they launched services with the aim of defeating
Napster-style file-sharing--and failed miserably. And let's not forget
that existing subscription services have signed up only a few million
people, vs. hundreds of millions of iTunes software downloads.

While the details are in flux, insiders say Morris & Co. have an
intriguing business model: get hardware makers or cell carriers to
absorb the cost of a roughly $5-per-month subscription fee so
consumers get a device with all-you-can-eat music that's essentially
free. Music companies would collect the subscription fee, while
hardware makers theoretically would move many more players. "Doug is
doing the right thing taking on Steve Jobs," says ex-MCA Records
Chairman Irving Azoff, whose Azoff Music Management Group represents
the Eagles, Journey, Christina Aguilera, and others. "The artists are
behind him."

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Best,

Andrea