Microsoft and Universal Make Zune Deal

zune1.jpgMicrosoft Corp. says it had struck a deal with Universal Music Group aimed at allowing the company to do more with a feature of its Zune portable music player that lets people share songs over a wireless connection.

Under the deal, Universal will receive a payment for every Zune player sold, in exchange for which Universal will provide more access to artists and rights to music.

Chris Stephenson, general manager of global marketing for Microsoft, declined to comment on the financial specifics of the deal late Wednesday, beyond saying that it called for the record label to share the payments it is receiving from Microsoft with Universal Music Group artists.

He said Microsoft also was pursuing similar deals with other big record labels.

Zune, which is scheduled to be released Nov. 14, is Microsoft’s attempt to compete with Apple Computer Inc.’s market-leading iPod player and iTunes music service.

Redmond-based Microsoft is hoping to differentiate itself from the iPod by including wireless technology to let people share some of their favorite songs, playlists or pictures with other Zune users who are close by.

The other users can then listen to the songs three times over three days before deciding whether to purchase the tune themselves.

Stephenson said the deal could provide the company with more freedom to allow song-sharing or other promotions, but he wouldn’t provide specifics.

“There’s certain marketing elements that we’re looking at going forward, all based around the sharing and wireless scenarios,” he said.

The Zune player will sell for $249.99. In addition to selling songs a la carte for about 99 cents each, Redmond-based Microsoft also will offer a Zune Pass subscription service, which will let users listen to any of about two million songs for $14.99 per month.


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