Universal won't renew iTunes contract

1st Jul 2007 | 23:00

Universal won't renew iTunes contract

Could open up for other exclusives with iTunes rivals

Universal Music Group , the world's largest music company, has refused to sign a long-term deal with Apple's iTunes Store to sell digital music downloads of its catalogue. Universal's decision could mean that exclusive deals with other services are on the way.

Music and videos from Universal - including artists such as U2, Sting, Eminem and Amy Winehouse - will still be available on the iTunes Store . But they will be available on a month-to-month basis rather than the two-year contract Apple had in mind, the New York Times reports.

New partnerships

As it is not tied into a deal with Apple , Universal could now agree to partnerships with other music services. This could lead to Apple's domination of the online digital music market weakening. Apple currently sells 70 per cent of the digital music bought in the US, as well as owning the most popular digital media player, the Apple iPod .

The two companies previously had a two-year agreement, which was extended by another 12 months last summer. That deal expired last month, the NYT says.

Universal produces one in three albums sold in the US. It has been demanding that new technology and media partners who want to license music share in the proceeds of the new products too. Last year, it signed a deal with Microsoft to take a percentage of the profits from the Zune digital media player.

HMV to sell DRM-free tracks too

Yesterday, troubled music retailer HMV announced it would start offering DRM-free music downloads on its website from September.

Over one million DRM-free MP3 tracks will be offered at the high-quality 328Kbps rate, as well as non-DRM music supplied by independent music labels. Prices will start at 79p, which is cheaper than Apple's DRM-free tracks which cost 99p. The downloads will be compatible with all digital music players, including Apple iPods.

HMV will also start selling both CDs and MP3s from the HMV.co.uk store rather than selling downloads from the separate hmvdigital.com site as it currently does. This is the first time a major retailer will offer you a choice of a CD or a digital album from a single site.

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