iPod to get hit with “pirate tax” in 2007?

Well, Microsoft has done it: By caving into the music industry’s insistence that people only want MP3 players to listen to stolen music (and somehow ignoring that iTunes is a top 10 music retailer now) and paying a “pirate tax” to the music industry on all 10 or 11 Zune units they’re going to sell this holiday season, it’s apparently opened the door for Universal Music to go after Apple:

Universal, the world’s largest music company, owned by French media giant Vivendi, was the first major record label to strike an agreement with Microsoft Corp. to receive a fee for every Zune digital media player sold.

“It would be a nice idea. We have a negotiation coming up not too far. I don’t see why we wouldn’t do that… but maybe not in the same way,” he told the Reuters Media Summit, when asked if Universal would negotiate a royalty fee for the iPod that would be similar to Microsoft’s Zune.

This is the same level of thinking that brought us the motion picture agency shrieking that the VCR would be the end of the movie industry. Old guys who don’t use modern technology should not be in charge of information industry companies. (And yes, that includes newspapers. Incidentally, Stephan Wingert, the publisher at the Daily Press, once told me he owns one of every model of the iPod. Neither old nor technology-averse.)

VCRs ended up being a huge boon for the movie industry, as were DVDs, which were supposed to kill the movie industry due to their “perfect” image quality. Instead of fighting MP3s, the music industry needs to be figuring out their own counterpart to the movie rental industry that will give them a fat new revenue stream.

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