PriceSCAN Blog

The reasoning here seems to be that Universal must be compensated by Zune owners for the music they will, on average, inevitably steal (this despite the DRM-friendly nature of the device – see "The Zune: Microsoft's Little Brown Lump Of DRM-Enforcing Digital Joy"). Don't particularly care for the artistry of 50 Cent or ABBA? Too bad – pay up. Needless to say, Universal's rivals are most interested in this deal, and are vowing to impose similar terms on Apple when it comes time for renegotiations on distribution via iPods
You can't blame them. Taken to its logical extreme, the labels wouldn't even have to sell any music to get paid, or even have anyone listening to their product. They get paid simply for existing, a privilege usually reserved for people with titles like "god-emperor". Not that the world isn't clamoring for their product; surely plunging CD sales are the result of music piracy and not general lack of interest in soulless psuedo-music utterly devoid of creativity.
However, there's a slight difference between squeezing Microsoft and Apple: Redmond doesn't have a near monopoly in this space, while Cupertino does (can the Apocalypse be far behind?). It's not at all clear that the Zune is an attractive enough player to make a dent in iPod hegemony. This leads to Zen-like koans like "If there is a tune and it's not available on iPods, does it really exist?" or "What is the sound of a music that's not playing on an iPod?"
When John D. Rockefeller consolidated Standard Oil's grip on the petroleum industry, he did so partly by gaining influence over railroads, allowing him preferential shipping rates and payments for competitor's shipments. Effectively, he raised the shipping rates for his rivals, aiding him in driving them into submission or out of business. To be sure, Rockefeller's power over distribution arose because he controlled an outsized portion of the distributed good, but control of the means of distribution itself proved at least partly decisive
There's no analogue to Standard Oil among the music companies. It's not clear any single content provider is significant enough to impact iPod sales by withholding its product, especially, given the massive market acceptance of those little white earbuds and the afore-mentioned tepid enthusiasm for major label music. Ganging up on Jobs might be more effective, but the DOJ tends to have issues with cartels, and there's often that pesky member that defects. So Apple might be in the position Standard enjoyed, not in terms of production itself but in having that crucial control of distribution.
The labels may hate digital music, but when it comes to the iPod, one wonders whether they can live without it. And as downloads grow, there's always the risk that artists will get serious about independent web distribution, cutting the record firms out completely (some popular indie acts have already done this successfully). Apple need not mind, as this product can still be distributed through iTunes – indeed, Cupertino might want to consider encouraging indies so as to reduce any leverage the majors have over it.
If that happens, there are some suits that can stop worrying about downloads and start contemplating downward mobility.