Microsoft music negotiations break down
Tags: Microsoft, Music, Apple, Marketing
We've written before on Microsoft's plans to launch a subscription music service. But today's Wall Street Journal notes that Microsoft has broken off talks with the music labels over disagreements about royalties. The issue: the labels are demanding royalties per user that rival what Yahoo is charging for its music. And in general, Microsoft, a mere $50 billion in the bank, doesn't like to lose money on services unless it is makes a strategic decision to do so, such as with the XBox or on MSN. So it sent the labels packing until they can toe Redmond's need for profit.
We continue to be skeptical that subscription music services will ever catch on, simply because of it being a rental instead of ownership model. And Microsoft has had serious marketing problems with its technology as well. But this disagreement only raises more questions about whether it will ever be a business to rival iTunes.
We've written before on Microsoft's plans to launch a subscription music service. But today's Wall Street Journal notes that Microsoft has broken off talks with the music labels over disagreements about royalties. The issue: the labels are demanding royalties per user that rival what Yahoo is charging for its music. And in general, Microsoft, a mere $50 billion in the bank, doesn't like to lose money on services unless it is makes a strategic decision to do so, such as with the XBox or on MSN. So it sent the labels packing until they can toe Redmond's need for profit.
We continue to be skeptical that subscription music services will ever catch on, simply because of it being a rental instead of ownership model. And Microsoft has had serious marketing problems with its technology as well. But this disagreement only raises more questions about whether it will ever be a business to rival iTunes.
posted by Carl Howe at
6:31 AM
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