Microsoft 'Raising Stakes' With Zune?

In a deal likely to foreshadow future agreements between makers of digital music players and content companies, Microsoft said it will pay Universal Music Group (UMG) a cut of each upcoming Zune device sold.

Expected to launch Tuesday, the Zune player faces stiff competition from Apple’s iPod, which dominates the digital music market. Microsoft hopes to emulate the iPod and iTunes success by offering the $249.99 Zune in conjunction with a Web site where consumers can purchase music.

Microsoft refused to comment on reports the pact will give UMG and the artists it represents $1 for each Zune device sold. The licensing agreement was in addition to the standard payments made to music publishers, Microsoft said.

The software giant said it plans to offer a “similar arrangement” to other music labels.

Currently, companies such as Apple, pay music publishers a cut of the songs they sell through their music stores.

Full story: internetnews.com