Prompt's TechBlog

According to The New York Times, Microsoft has struck a deal with Universal Music to give it a royalty on sales of its Zune music player. The record company stands to get over $1 from the $250 price of the hardware and Microsoft has indicated that it'll strike deals with other labels too.

Music sales have reportedly been falling, and record companies have been quick to blame it on music piracy. Doubtless there's a lot of music piracy going on - since the 80s we've been warned that 'home taping is killing music' - but that's not likely to be the sole reason that music sales are falling. People have many more entertainment choices today, including DVDs and games, competing for the pot of money that twenty years ago might have been spent mainly on music. The iPod also transforms how people enjoy the music they've already bought. If you can shuffle and re-order all the CDs you've bought, it brings new life to your music collection. You have less need to buy new CDs when you can rediscover all the music you have loved in your pocket.

Doing so is illegal of course: a recent survey said that Apple has sold about 20 songs per iPod. Entertainment industry mogul David Geffen told the New York Times: "Each of these devices is used to store unpaid-for material." That's a leap the record industry often makes - that music in iPods is stolen if it hasn't been bought as a download. But have record companies forgotten about the money they got for the CDs that are being copied into iPods in the first place?

Yes, it's an infringement of the letter of copyright law to copy CDs into iPods for personal use. But is it really an infringement of the spirit of the law? People can only listen to one song at a time and as long as they're not sharing their copies, does it really matter what device they use to play back music they've bought, and for which record companies have been paid? Record companies argue that they should be paid twice for the same music in different formats. Consumers disagree and often believe that this legal right is an unintended side-effect of copyright law, far out of step with its original intention.

Regarding the Zune royalty, Universal reportedly said: "it is only fair to receive payment on devices that may be repositories for stolen music". That's a weasely sentence. How can it be fair to charge everyone a fixed fee for a crime which Universal concedes they might not commit and which they cannot in any case have committed with a device they have yet to buy?

There's a study in the book Freakonomics which found that when a nursery imposed fines for parents collecting children late, parents were absolved of their moral obligation to be punctual. They felt they could turn up whenever they wanted and pay the fine.

There's the risk that Universal has set a similar precedent here. By forcing people to pay for pirating music when they buy a hardware device, Universal is legitimising copying music. People will reason that since they've already paid for the privilege, they might as well get stuck in.