Om Malik has a great piece today over on GigaOM. He points out that Microsoft has fallen to the Mafia tactics of the music industry and will pay $1 for every Zune device to Universal Music Group (UMG). At one point, he wonders if this would have happened at Microsoft’s height of dominance.
In this battle of the monopolists, Microsoft blinked and decided to pay up. (Would this have happened a few years ago, when Microsoft ruled the technology planet?) Remember how Jobs stood up to these music industry bullies. Today they are asking $1 a device; what is to stop them from asking for say $10 or $20 per device down the road. This shakedown should result in a serious investigation into the music industry cartel.
The music industry has really lost its marbles, they do believe that their customers are crooks, they do believe that they are being cheated by “fair use”, they do believe that they should get a payment every time one of their songs is heard by anyone anywhere from any media source.
The sad fact is that these once-powerful media companies are crying like children who dropped their candy, and it is obscuring their ability to logically think and plan out a relevant business model in the “new media” world.