Mr. Desperate, meet my friend Mr. Desperate

by Mathew on November 9, 2006 · 2 comments

Two things strike me about the deal between Microsoft and Universal Music, which will see the record company get a cut of every Zune player the software giant (theoretically) sells. The first is that such an arrangement is an obvious sign that Microsoft is desperate, and the second is that it’s an obvious sign that the major record labels are not just desperate but creatively bankrupt.

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It seems clear that the record labels see Microsoft’s Zune launch as a key chance to make up for the boatloads of cash they’ve missed out on with Apple and iTunes (and their inability to get a government-mandated levy on portable devices). And the fact that Microsoft is willing to go along with their demands for a cut of the sales proceeds is a sign of how desperate the software company is to get some support for Zune, although it’s certainly not getting much support from some music fans.

I’m going to go along with Om Malik’s take on this one, which is that if you look at the amount of money Universal is likely to make from their Microsoft deal, it’s probably about the same as selling a single extra song to all the people who have bought an iPod. As Om puts it: “If the music industry cannot sell one additional song to consumers (and has to blackmail for more money) then, you as a business, have lost grip over your core competency.”

George Scriban at Global Nerdy has some similar thoughts.

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