The phrase repeated near and far is "the music industry's model is broken." It turns out the changes that are most directly and immediately affecting bottom lines are the ones like the deal Universal Music Group has with Microsoft. UMG, Reuters reported yesterday, will receive a payment for every Zune sold. UMG, and other labels, are interested in two things: Weakening Apple's digital music domination and receiving money from hardware sales.

"(UMG's Doug) Morris said the deal could set a precedent in negotiations with other device manufacturers, including mobile phone makers, who are increasingly seeing music as important to the future of their businesses. Microsoft, which has already had early talks with other labels about the fee, said it is keen to work closely with artists in the development of Zune.."

The New York Times' Jeff Leeds has more:

"The company is expected to receive more than $1 for each $250 device, according to executives who were briefed on the pact. Under the deal, Universal, the world’s largest music corporation, will receive a percentage of both download revenue and digital player sales when the Zune and its related service are introduced next week. The pact comes after weeks of tense talks and averts a standoff that might have crippled Microsoft’s attempt to compete against the iPod."