Redmond, WA & New York, NY (November 14, 2006)–Microsoft’s much noted Zune player debuts today at stores across the U.S. Heavily hyped as the software giant’s bid to topple Apple’s ubiquitous iPod, the 30GB player, which sports a 3-inch screen, marks Microsoft’s second attempt to muscle into the market, following its failed PlaysForSure effort a few years ago. Helping promote the new media player, free concerts featuring acts like Queens of the Stone Age and the Red Hot Chili Peppers were held in conjunction with the release; Bill Gates himself gave away a player at Seattle’s event Monday, which featured a concert by Secret Machines.
Microsoft’s ZuneZune and its ensuing online download store nearly hit the shelves without support from Universal Media Group, however; UMG, the world’s largest record company, initally refused to license its tracks to the store. Late last week, however, Microsoft and UMG announced an agreement which creates a new revenue stream for UMG and its artists: in addition to the standard payments it will make to UMG for the sale of its music, Microsoft will also pay UMG a portion of Zune device sales. Since Microsoft already had agreements in place with other labels that did not include the Zune sales provision, the company plans to retroactively offer a similar arrangement to other music labels and their artists.
“This agreement with Microsoft around Zune is a significant milestone for our company and our artists,” stated Doug Morris, chairman and CEO, Universal Music Group. “This move demonstrates there can be a win-win situation where consumers have a great experience while labels and artists are also fairly compensated. We applaud Microsoft for its innovative and consumer-friendly Zune store and device.”
“At a time of transition for the music industry, Zune aims to be a leader in supporting artists and enabling the creative possibilities associated with connected entertainment. We look forward to working with the industry to make sure labels and the artists have a very bright future,” said Bryan Lee, corporate VP, Microsoft entertainment and devices. “We believe that the music consumer will appreciate knowing that when they buy a Zune device, they are helping to support their favorite artists.”
Universal Music Group