Reports say Microsoft has broken off its talks with music companies
Looks like it would be tougher for Microsoft to enter the subscription based music download service than they expected. The company aimed to target services like Napster, RealNetworks, and Yahoo! who offer subscription based music download service at nominal rates allowing customers to download as many songs as they want for a limited period of time depending upon their subscription. The songs are rendered useless after their period is over.
The news of the talks breaking between Microsoft and the music companies has been reported by the Wall Street Journal, which cited unnamed sources for their information. This might delay the much expected music subscription service rumored in the market from the software giant. WSJ claimed that the talks broke over the high royalty demanded by the music companies per subscriber.
This meant, it became complicated for Microsoft to price the service competitively and remain profitable. Some of the music companies involved in the process are said to be EMI Group Plc, Warner Music Group Corp., Universal Music Group and Sony BMG. Music subscription service is seen to be one of the potential big markets as it can lead to new generation of customers who would not like to purchase song forever at a high price and rather have a subscription model enabling them to download and listen as many songs as they want for a specific time period.