iTunes & Universal... or not?

The New York Times reported yesterday that the Universal Music Group - the world’s biggest music corporation - last week notified Apple that it will not renew its annual contract to sell music through iTunes, according to executives briefed on the issue who asked for anonymity because negotiations between the companies are confidential.

Instead, Universal said that it would market music to Apple at will, a move that could allow Universal to remove its songs from the iTunes service on short notice if the two sides do not agree on pricing or other terms in the future, these executives said.

Embarrassingly for Apple, the removal of its catalogue would mean the loss of Apple poster child U2.

Can and will Universal go through with this? Ultimately, I think that they won't. Universal, and others in the record industry with them, is not happy with Apple's fixed $0.99 price and the fact that the "iTunes-model" encourages or at least facilitates buying singles instead of albums. Sales of digital music through iTunes and other sources accounted for more than 15 percent of Universal’s worldwide revenue in the first quarter, or more than $200 million, so it would be a significant financial blow.

As a music-consumer, I love iTunes. Sometimes I purchase one song by an artist I think I may like but don't really know yet, and I end up buying the entire album if I like the one song. Sometimes I just buy an individual track because I have always wanted that particular song but would never and will never buy the entire album. In any case, the music industry is better off, because in neither case would I have bought the entire project outright. And the low price? It makes me buy more. It's actually kind of scary to see how much I have spent on iTunes in the past two years.

And finally, as an independent artist, I love that people can try out one track. I love that my consumers have choices.

So I hope that Universal takes a step back. I don't think this is a good move for artists or for the music industry as a whole. Just my $0.02.