After Universal made it abundantly clear earlier this year that they were less than satisfied with Apple and iTunes, many estimated that UMG would shortly pull out of selling music online or team up with another vendor. They didn't pull out of Apple altogether, though they have been experimenting with other companies. Now it seems they are going in a different direction altogether, unveiling plans to launch their own music server.
UMG, potentially along with some other big players like Sony BMG and Warner, is developing an online music store that they are tailoring to their own business style. Given the choices of Sony and UMG in the past I can only imagine whatever they have in store is going to be less than popular. Despite that, their goal is clearly to compete directly with iTunes. This is the result of what Universal sees as unfair practice coming from Apple:
But before long, Morris realized he and his fellow music executives had ceded too much control to Jobs. "We got rolled like a bunch of puppies," he said during a recent meeting, according to people who were there. And though Morris hasn't publicly blasted Jobs, his boss at Universal parent Vivendi is not nearly so hesitant. The split with record labels--Apple takes 29 cents of the 99 cents--"is indecent," Vivendi CEO Jean-Bernard Levy told reporters in September. "Our contracts give too good a share to Apple."
Their model, while a bit vague currently, seems to turn the entirety of the UMG library into a subscription – buy one UMG music device and you've bought access to all their music. Of course, I imagine you'd be buying access only on that device and trying to move it to another would displease UMG.
Still, they are treading into dangerous territory – they still are selling music through iTunes, and if they go into direct competition with Apple, Apple may just refuse to deal with them altogether. On top of that, iTunes already has a market share in excess of 70%. That's not a lot of wiggle room.