April 25, 2007

Coolfer has heard from a few sources that MusicNet, a content provider to music services such as URGE and Microsoft's Zune, are playing hardball with some digital distributors. As the parties renegotiate their contracts, MusicNet has reportedly asked for an extra fee based on the volume of the distributor's catalog. The fee could be thought of as a surcharge or a handling fee that MusicNet argues is necessary to handle the increasingly high volumes uploaded by distributors.

I was surprised to hear of the development. You mean there is such thing as too much digital music? No limitless long tail? No celestial jukebox? There are costs involved in putting together a large catalog of music. Perhaps those costs are more than previously thought.

Negotiations are just those -- negotiations. We'll have to wait to see how things pan out. For the sake of digital stores' music catalogs, and for the good of digital music's development, I hope companies like MusicNet do not cherry pick from distributors' catalogs or impose volume surcharges.

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Posted by Glenn at 1:40 PM | |