We have been hearing some grumblings recently from the record labels about iTunes' strong hold on the online music industry. Apparently some of them are complaining about the uniform pricing across all songs and some are unhappy with the use of DRM (Digital Rights Management) on their songs. Well, today we are seeing some of those grumblings take center stage. The New York Times has the scoop that Universal Music Group has decided to not renew their annual contract with Apple to serve up their music on iTunes. Although the article does say that Universal may still offer music on iTunes on a per-artist basis, they won't offer their whole catalog and they can pull out whenever they want since they are no longer under contract.
This is going to be a huge blow to Apple, Universal, and most of all, the consumers. Apple will lose a lot of the business that Universal Music brings in (Universal Music accounts for about a quarter of all music sales). Universal will lose the business that selling their music on iTunes brings. Universal's current estimates are that 15 percent of all of their sales come from online music. Lastly, the consumers will no longer be able to buy Universal's music on iTunes and put it on their iPods. Since the iPod is not compatible with any other online music service, they have nowhere else to turn.
Pulling Universal's entire catalog from iTunes (which I doubt will end up happening) would leave a pretty large void in iTunes' offerings. Universal Music represents artists ranging from Eric Clapton to Nirvana, Hendrix, and Jay-Z. You can check out some of their more notable artists here. This would be really unfortunate for everyone involved. A lot of money would be lost and a lot of music would not be available to those loyal iPod users. Oh and one more thing...one of the bands that launched the iPod and iTunes to new heights with their Vertigo commercial, U2, is also under Universal's label.