The Zune Tax

Om Malik has a nice writeup on the news that Microsoft is going to pay Universal Music $1 for each Zune that’s sold, and they’ve extended the offer to the other members of the ‘big music’ cartel. I’m torn between thinking that Microsoft simply caved-in to Universal’s threat to withhold it’s library from the Zune Marketplace (they’re already willing to make a loss on each unit to get market penetration, so what’s another $5?) and the idea that Microsoft saw this as a great way to change the competitive landscape for Apple by creating the assumption that the big music distributors are owed a ‘hardware tax.’

The one quote that stood out for me from the original news article was from David Geffen, who said: “Each of these devices is used to store unpaid-for material. This way, on top of the material people do pay for, the record companies are getting paid on the devices storing the copied music.” To me, that really sounds like an invitation to put ‘unpaid-for’ music on the Zune.

One of the problems that the record companies are having, as one of Om’s commenters points out, is that unlike the previous format shifts brought about by technology (from vinyl to CD for example), digital music doesn’t force everybody to buy a second version of the music that they already own.

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