Microsoft Ends License Talks with Music Labels

Found on Reuters on Tuesday, 04 October 2005
Browse Various

Microsoft Corp. has broken off licensing talks with the four global music companies, raising questions about the software giant's plans to start a subscription-based music service, the Wall Street Journal reported Tuesday, citing unnamed sources.

The paper reported negotiations broke down Friday over what Microsoft considered high royalty rates sought by EMI Group Plc, Warner Music Group Corp., Vivendi Universal's Universal Music Group and Sony BMG, a joint venture of Sony Corp. and Bertelsmann AG.

According to several people briefed on the matter, the labels separately were seeking royalty payments of $6 to $8 per user, per month. People close to the labels say that is in line with what existing subscription-music services pay, the Journal reported.

If not even MS can afford to pay the labels, then the industry should really redesign its prices.