Wednesday, July 04, 2007

Universal Music may not continue contract with Apple

The Universal Music Group of Vivendi, largest music company may not renew their contract with Apple Inc, which will expired soon. If this is true, a long list (estimate one third) of songs will be removed from iTunes online music store.

There were five largest music publishing company, British's EMI, Sony Music Entertainment, Warner Music Group, German's BMG and Universal Music Group which is own by French's Vivendi. BMG joint venture with Sony and form Sony BMG in 2004, and become the big four record labels (EMI, Sony BMG, Universal and Warner). Universal has proposed to buy BMG Music Plublishing, and Warner is actively seeking to buy EMI (refer Warner Music mulls new offer to buy EMI).

Why don't Apple just buy one of the music company, since iPod and iTunes online music constribute a significant profit to Apple. Oh! Yes, they can't, in name infringement settlement with Beatles' music company-- Apple Corp (England) in 1980s and 1991, Apple Computer agreed not to enter the music business.

How about iPod and iTunes music store? In September 2003, Apple Corps (Beatles) sued Apple Computer again, for breach of contract. The court ruled in favor of Apple Computer, base on section 4.3 of the agreement, Apple Computer field of use include software, hardware and broadcasting services. Apple Computer using the Apple name on their (online) store and not the music. Beatles catalog is not available on iTunes music store.

May be Apple Computer should have just bought over Apple Corps. Apple did consider to buy a music company, read a cnet story here, "Apple may buy Universal Music", which dated back in year 2003. The Apple share price is $13.20 at that time, and now is $127!

"When your customers are iPod addicts, who are you striking back against?," said Ken Hertz, an entertainment lawyer who represents artists like Beyonce and the Black Eyed Peas (refer to the CNet news). Recently Apple Inc. and Apple Corp agree to reach a settlement (finally!), Apple Inc. are allow to use the Apple name and logo in all area including music.

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