La Microsoft rinuncia a trattare con le major della musica per alimentare il suo servizio di vendita di brani online con un metodo di vendita a sottoscrizione. Ne ha parlato per esempio il Wall Street Journal.
Microsoft Corp. has broken off licensing negotiations with the four global music companies, raising questions about the Redmond, Wash., software maker's plans to start a subscription-based music service, according to people familiar with the talks.
The development highlights the continuing fragility of the nascent digital-music business. According to the people briefed on the discussions, the negotiations broke down Friday over what Microsoft considered unduly high royalty rates sought by the labels -- a group comprising EMI Group PLC, Warner Music Group Corp., Vivendi Universal's Universal Music Group and Sony BMG, a joint venture of Sony Corp. and Bertelsmann AG.
(...)
Microsoft hasn't announced a subscription music service, but it has been widely expected to make such an announcement soon. However, the company said the breakdown in its talks with the labels would indefinitely postpone a launch, according to two of the people close to the situation. It's not clear when or if the talks will restart.
Microsoft has been in talks to acquire a stake in Time Warner Inc.'s AOL service, which already has its own music subscription offering. It is unclear where those talks stand.
A Microsoft spokesman declined to comment. Microsoft has an existing operation that sells downloaded songs online, in the vein of Apple's iTunes.
According to several people briefed on the matter, the labels, in separate negotiations, were seeking royalty payments from Microsoft that would have amounted to a total of $6 to $8 per user, per month. People close to the labels say that is roughly in line with what the existing competitors in the subscription-music business pay.
Microsoft was seeking to pay less, in order to charge consumers what it considered a competitive price -- most likely about what Yahoo charges.
In the digital-music business, it isn't uncommon for retailers to sell the music itself at a minimal profit or even at a loss, deriving supplemental revenue from related business. Yahoo sells advertising on its music service, for instance, while Apple has made no secret of the fact that its iPod music players are far more profitable than the music that goes on them.
The record labels, according to these people, expected Microsoft to go along with the same basic business plan, offsetting whatever losses it incurred on the music service through sales of some other product. Microsoft, for instance, licenses the so-called digital-rights-management software that is used by the other subscription services.
However, even Apple's pricing policy has long been a source of friction with the music companies. The labels have long sought, with increasing urgency, to persuade Apple to charge more than 99 cents a track for at least some highly desirable offerings -- and less than 99 cents each for others. Apple has been unwilling to embrace such "variable pricing," as it is known.
The breakdown in the Microsoft talks came just ahead of an announcement by the International Federation of the Phonographic Industry that digital sales (including sales of cellphone ring tones) tripled last year to $790 million, or 6%, of total music sales. The indefinite postponement of a major new offering such as Microsoft's subscription service could damp continued growth.
