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.
Context & Ripple Effects
Doug Morris has been moving toward this confrontation all year: Universal first surfaced its grievances in a public dispute with Apple over iTunes in July 2007, then days later confirmed it would not renew its iTunes contract, leaving the store without the world's largest label's catalog on standing terms. What changes now is that Universal is not merely withholding catalog — Morris is recruiting other major labels into a coalition service built to compete with iTunes directly.
The reception among analysts was skeptical from the start. Techdirt noted the plan amounts to reviving PressPlay and MusicNow, subscription ventures that already failed once, while Silicon Alley Insider asked whether the effort was 'too little, too late' against an incumbent with the dominant player and store. Mathew Ingram framed the strategy bluntly as an attempt to force people to take music they didn't ask for — bundling rather than winning listeners track by track.
First-order effects
- Universal's catalog stays off standard iTunes terms, so Apple either concedes ground in negotiations or sells iPods without the biggest label's new releases — a direct hit to the store-label lockstep that made iTunes the default.
- Morris's coalition gives participating labels their own storefront and pricing lever, ending their dependence on a single retail gatekeeper for digital sales.
Second-order effects
- Apple's counter-move options narrow to price cuts, promotional pressure on rival labels, or deepening hardware exclusives — each costly — while holdout labels face pressure to join the coalition or risk being shut out of whatever distribution it builds.
- Device makers competing with the iPod gain a potential differentiator if the Universal-backed service bundles with non-Apple players, shifting the battleground from store selection to hardware-plus-subscription packages.
Third-order effects
- If the coalition holds, the industry's center of gravity shifts from per-track download stores toward label-controlled subscription and bundling models — a re-run of PressPlay-era thinking with far more catalog leverage behind it.
- The episode tests whether content owners can recapture the distribution layer from platform owners, a structural question that will shape every subsequent negotiation between media suppliers and the companies that own the customer relationship.
The trend: Recorded-music distribution is tilting from hardware-maker-owned download stores toward label coalitions attempting to rebuild direct-to-listener subscription businesses.