Rumors of Microsoft potentially making a play at becoming a part of the major label system though an aquisition of EMI are "odd and unlikely" one analyist says. This comes after some media speculation that the software giant was interested in a takeover of the music giant. Microsoft has had a tough time with the labels lately. As the Zune nears retail, details are surfacing not only of Microsoft's agreement to pay Universal $1 per Zune sold -- an absolutely ludicris idea that amounts to Universal being paid for its existance, as near as I can tell -- but also of rocky licensing talks for Zune's subscription service. Where label reps have reportedly demanded between $6 and $8 per month in licensing fees for Microsoft to offer subscription music content on Zune, far more than rivals Yahoo! Music or Napster pay to offer a similar service.
The labels have shown time and time again that, when they smell money in someone's pockets, they pounce. Maybe it wouldn't be a crazy idea for Microsoft to become a part of the music business; They've already mastered anti-competitive practices and would only lack the knowledge required to drain the talent and lifeforce out of underperforming new artists, a skill I'm sure they could develop quickly and inexpensively.













1. I've worked with labels as an independent artist for quite a while, and I totally agree that they are indeed revenue-driven by nature. In my opinion, both Microsoft and the labels should pursue the idea of dynamic pricing which would let the market/buyers dictate the pricing of songs. See companies like Digonex (www.digonex.com) that are pioneering this approach.
Microsoft has done nothing wrong in their approach to the software industry, obviously most people who have been involved with the creation/development of Microsoft products have been handsomely rewarded. From a consumer's perspective I have to admit that their products do offer a substantial amount of value, even if isn't free. I've tried the other "free" products out there and they are useful at first, yet after a while I find myself going back to the MS products. When I think about the many talented people that work as a team to produce their products, it is evident that there's a lot of functionality that has been thought through for many years.
Posted at 10:24AM on Nov 11th 2006 by Rectal Fryer