Like most Californians, UMG changes its lease with iTunes from yearly to month-to-month

by David Spark on July 5, 2007

Californians are transient by nature. They don’t like to make commitments. And neither does Universal Music Group. They’ve decided to opt out of a long term contract with the Apple iTunes Store and go month-to-month and be non-exclusive. For those of you who don’t live in California, that’s the traditional way most rental agreements work for apartments. You sign a one year contract and then after that, if you agree to keep paying, the lease goes month-to-month.

It’s pretty much at will and they can pull out at any time. Which is pretty much the case with any retail partner. UMG’s attitude is why should iTunes be any different? They’re just another Sam Goody. They could go under any day, and we don’t want to be brought down by them. In addition, the conventional wisdom here is they don’t want to adhere to Apple’s $.99/song pricing model. And this would give them an out to sell highly sought after music at a higher price at a different location. Not all music is created equal. You don’t sell all software for the same price. Why should you sell all music at the same price?

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