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Old November 10, 2006, 09:06 AM
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Default Microsoft to pay Universal for every Zune sold

Reuters has posted details about a deal between Microsoft & Universal, were Microsoft will pay Universal a fee for every Zune unit sold.

NEW YORK, Nov 9 (Reuters) - Microsoft Corp. (MSFT.O: Quote, Profile, Research) has agreed to pay Universal Music Group a fee for each new Zune digital music player it sells when the iPod rival launches next week, the companies said on Thursday.

The groundbreaking deal could redefine the digital music business pioneered by Apple Computer Inc. (AAPL.O: Quote, Profile, Research)

Rivals including cell phone makers eventually could pay for hardware sales as well as for the music itself, Universal said.

Microsoft is trying to break into an industry closely aligned with archrival Apple, which is credited with nearly single-handedly building the legal Web music world with its iPod players and iTunes music store.

But Apple does not give a cut of sales of iPods to music companies. It only pays labels for songs sold on its iTunes music store.

"We felt that any business that's built on the bedrock of music we should share in," said Doug Morris, chief executive of Universal, owned by French media giant Vivendi (VIV.PA: Quote, Profile, Research).

He did not disclose the amount of the fee for the Zune, which launches next Tuesday.

The iPod has a nearly 80 percent share of digital media player sales, and its iTunes music downloads site is also the dominant online music store.
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