Believing that the closed end deal with Apple iTunes (AAPL) may have slowed the growth of the music industry, Universal Music has decided to sell music through the company on a month-to-month basis, freeing it to make deals with any digital distributor.
Apple had made the offer to Universal for a two-year deal, which the company rejected. Now they can enter into exclusive deals with other companies as well.
The music companies has been concerned that Apple has too strong a hold on the industry and are looking for multiple digital outlets, rather than exclusive deals only with Apple. Apple currently has about 70 percent of the digital market in the U.S., and of course sells the most popular digital music player in the iPod.
The new decision basically puts Apple in the same position as the deals Universal has with their retail outlet partners, as far as terms go.
With the introduction of the iPhone last weekend, it has made the music industry even more nervous as they fear Apple may become even more dominant in the sector.
Apple recently passed Amazon.com to become the third largest music retailer in the U.S., with only Wal-Mart (WMT) and Best Buy (BBY) in front of them.
Universal has also been leading the effort to get a piece of the action of music devices as the music industry scrambles to increase revenue after its huge losses in the digital music age. They did manage to land a deal with Microsoft (MSFT) to get a small portion of the sales of their digital music player, the Zune.
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