Universal's iTunes Deal Hits Sour Note

Major music vendor will pull out of long-term contract with Apple
By J. Kelman,  Newser User
Posted Jul 2, 2007 7:53 AM CDT
(FILES) A pedestrian passes a wall covered with Apple iPod advertisements...   (Getty Images)
camera-icon View 6 more images

(Newser) – In the latest volley in the escalating war between the music industry and Apple's iTunes, Universal Music Group will not renew its contract with the online music seller, the New York Times reports. The digital retailer will still feature artists signed by Universal, the largest music company in the world, but the label can pull out at any time.

The move gives Universal, home to artists including U2, Mariah Carey, and 50 Cent, some leverage over the digital giant, but the numbers spell trouble for both parties. Although Universal's brands control one-third of new American releases, digital-music sales represented 15% of Universal's worldwide first-quarter revenue. Reuters reports that a month-to-month deal will replace the agreement that expired in June. (Read more iTunes stories.)