By now we realize that Universal is no longer working side by side with iTunes to deliver 99 cent downloads. In fact they have went as far as to suggest that paying Apple 29 cents per download is usury, though it is arguable how much of that 29 cents is going towards the artist. One way of looking at it is that Apple was simply trying to recoup the costs of manufacturing their players and allowing Universal to use iTunes as a distribution service, but in any event they want to see if they can get everyone else back into the MP3 business by creating a new business model in which downloads were free, in theory to the consumer. How does it work; hardware vendors absorb $5 of the cost of delivering downloads for a month, for whatever users can still download what they want to the MP3 player as they have essentially paid for a subscription service through purchasing the technology. The idea is that adding $90 to the cost of the player is reasonable figuring that after 18 months most users will want to purchase a newer MP3 player anyway.
In theory this is good for the consumer; lazy individuals like myself that aren't interested in trolling iTunes for new music, or jumping through hoops as a technician trying to find ways to force MP3s onto the iPod that shouldn't be there (in the event I do not want to pay the 99 cents per track or stick with the downloads that Apple is offering me) will have new websites that I can troll for music that can be downloaded for free quickly & easily with a minimum of fuss without having to worry about DRM. But there are a lot of unanswered questions; if Universal is successful, will it ever apply to television and movie studios that may try to work out an arrangement with video players in the future, are users free to share their music and if so to what extent (technically sharing should be a moot point since chances are your friends will have a similar player themselves), what percentage are artists getting from this (is it similar to radio royalties), and so on and so forth.
The fun behind this idea is that Steve Jobs has effectively used his marketing expertise to create the convoluted arrangement with Universal in the first place but refused to renegotiate the terms with which Universal wanted to change what customers were charged (or how much they were having to pay Jobs) when the market started to change. The fact that iTunes has 70% of the market is a moot point when you consider that the price is not the competitive factor behind the iPod, it is that Apple was essentially to downloading what Microsoft Windows was to the OS back in the 90s. No one had a compelling business model for consumers; so now the rest of the industry wants to catch up and the music corporations want their own model which they should have had in the first place. The bottom line is whether or not Universal, who has the overwhelming majority of published music these days, is effective at doing what they should have done all along or will they sit back and allow another tech company to change the rules all over again? The arrangement was one of convenience, and though it wasn't the best model for consumers to begin with it was one of the more viable ones and the most practical one for consumers to co-op at the time; Zune was a joke and DRM killed the MIcrosoft/Rhapsody arrangement before it even began, plus the players were ugly. The future may be Universal tapping into cell phones and other Internet appliances to make downloading mainstream and the only thing the market needs is a MP3 that has it's own download ability without the computer that isn't a cell phone but a real dedicated advice. If nothing else, it will interesting to see what the next chapter of downloading offers in this DRM free age.
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