universal

On November 14th, the Microsoft Zune, a wireless portable media player, will be available for sale. The hype in anticipation of the Zune has been pretty darn big, and apparently other companies (read: Universal, the world’s largest music company) are looking to cash in.

Microsoft announced yesterday that it would be giving over $1 per each Zune sold to Universal. That’s $1 per a piece of hardware that Universal had no involvement in producing. However, the agreement reached means that Universal will now be licensing its music in the Microsoft Zune store, which leaves the status of iTunes to be determined.

Microsoft’s agreement to pay Universal per Zune unit sets off a heat wave and puts a lot of pressure on Apple to do the same (Apple currently pays off a portion of royalties per iTunes sales and does not compensate anyone for the sales of its iPods). Universal has one year left of its licensing agreement with the iTunes store, and who knows what kinds of negotiations will be made once the Zune precedence is set. Apple is Microsoft’s biggest competitor in the portable music market, so Microsoft played the pretty devious card when agreeing to this deal.