Microsoft ending talks with Music Labels for high royalty fees

[mzkhadir]

NEW YORK (Reuters) - Microsoft Corp. (Nasdaq:MSFT - news) has broken off licensing talks with the four global music companies, raising questions about the software giant's plans to start a subscription-based music service, the Wall Street Journal reported Tuesday, citing unnamed sources.

The paper reported negotiations broke down Friday over what Microsoft considered high royalty rates sought by EMI Group Plc (EMI.L), Warner Music Group Corp. (NYSE:WMG - news), Vivendi Universal's (EAUG.PA) Universal Music Group and Sony BMG, a joint venture of Sony Corp. (6758.T) and Bertelsmann AG. (BTGGg.F)

Services like those offered by Napster Inc. (Nasdaq:NAPS - news), Yahoo Inc. (Nasdaq:YHOO - news) and RealNetworks Inc. (Nasdaq:RNWK - news), allow users to download music onto personal music players and have the potential to replace compact discs.

Microsoft has not announced a subscription music service, but it was 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, the Journal said.

Microsoft has also been in talks to acquire a stake in Time Warner Inc.'s (NYSE:TWX - news) AOL service, which has a music subscription plan.

According to several people briefed on the matter, the labels separately were seeking royalty payments of $6 to $8 per user, per month. People close to the labels say that is in line with what existing subscription-music services pay, the Journal reported.



http://news.yahoo.com/s/nm/20051004/tc_nm/microsoft_dc

 

[Anubis]

you should have just posted the whole article because that little snip is uselss without the rest of the article

 

[Genx87]

Originally posted by: mzkhadir
Bret540 writes "Yahoo is reporting that Microsoft has ended license talks with four major music labels. From the article: 'The paper [the Wall Street Journal] reported negotiations broke down Friday over what Microsoft considered high royalty rates.' How much more can the music labels demand when even Microsoft won't go to market? With other recent developments, one must wonder how long the music industry can keep pushing."

http://news.yahoo.com/s/nm/20051004/tc_nm/microsoft_dc

Does make you wonder, Microsoft, a company that makes billions a year and can afford to throw away billions of projects like xBox thinks your product is overpriced. Then I think your product is priced beyond anything that can be considered sane.

No surprise though, the RIAA members are starving. They can barely make the mortage payment on that 3rd mansion.

 

[Bateluer]

The RIAA is a lumbering dinosaur.

 

[Demon-Xanth]

How long until an MS recording studio is made?

 

[1Cheap2Crazy]

If the record companies own the music, why do they license it out to other sites(apple)? Why don't the record companies and the riaa open up their own site and charge whatever they want. I'm confused by these people. Can someone offer me a simple explanation?

 

[ElFenix]

Originally posted by: 1Cheap2Crazy
If the record companies own the music, why do they license it out to other sites(apple)? Why don't the record companies and the riaa open up their own site and charge whatever they want. I'm confused by these people. Can someone offer me a simple explanation?

the record companies have no experience in creating software, user interfaces, running server farms, collecting massive amounts of small payments, etc. so they hire someone else to do it that has the expertise to do so. plus, there are a lot of good finance theory reasons why companies should not be massive conglomerates with fingers in every pie (mostly dealing with the expertise of management in various fields)

 

[mzkhadir]

Originally posted by: 1Cheap2Crazy
If the record companies own the music, why do they license it out to other sites(apple)? Why don't the record companies and the riaa open up their own site and charge whatever they want. I'm confused by these people. Can someone offer me a simple explanation?

they probably had no plan when it came to online politics and then napster came and blew them out of the water.

 

[Genx87]

Originally posted by: 1Cheap2Crazy
If the record companies own the music, why do they license it out to other sites(apple)? Why don't the record companies and the riaa open up their own site and charge whatever they want. I'm confused by these people. Can someone offer me a simple explanation?

Because then it would legitimize it and canibalize their CD sales. Right now they got you on the hook for 12-16 songs when all you want is 2-3. The other 9-12 songs on the albumn suck ass but they got this nice little scam going where you are paying for them regardless.

If they open up the vaults then you can purchase those 2-3 songs at 6-9 bucks and not spend 17 bucks for a new CD.

 

[mugs]

Originally posted by: Genx87

Originally posted by: 1Cheap2Crazy
If the record companies own the music, why do they license it out to other sites(apple)? Why don't the record companies and the riaa open up their own site and charge whatever they want. I'm confused by these people. Can someone offer me a simple explanation?

Because then it would legitimize it and canibalize their CD sales. Right now they got you on the hook for 12-16 songs when all you want is 2-3. The other 9-12 songs on the albumn suck ass but they got this nice little scam going where you are paying for them regardless.

If they open up the vaults then you can purchase those 2-3 songs at 6-9 bucks and not spend 17 bucks for a new CD.

If that was the reason, then they wouldn't be letting Apple sell their music for $1 a song.

The reason there's only 2-3 "good" songs on a CD is because you only like the songs the radio stations play to death. If they picked a different set of songs to release as singles, you'd probably like those instead.

 

[lokiju]

Originally posted by: mugs
The reason there's only 2-3 "good" songs on a CD is because you only like the songs the radio stations play to death. If they picked a different set of songs to release as singles, you'd probably like those instead.

:laugh: Now that's funny!

 

[Genx87]

The reason there's only 2-3 "good" songs on a CD is because you only like the songs the radio stations play to death. If they picked a different set of songs to release as singles, you'd probably like those instead.

I dont listen to music radio.

 

[mugs]

Originally posted by: lokiju
:laugh: Now that's funny!

Maybe you listen to sucky artists then... If you listen to that manufactured crap they play on many radio stations, then don't expect much. But if you listen to good bands* then you get consistently good music.

*band: A group of musicians** who actually care about the music they're producing

**musician: A person who plays a musical instrument*** or sings

***musical instrument: not a synthesizer

Meh... I've owned a lot of CDs, and I liked most of the songs on most of them.