Universal balks at Apple deal

Music Group will not renew iTunes contract

In a move designed to undercut the growing music retail power of Apple Inc., Universal Music Group is set to notify the company that it will not renew a long-term contract to sell digital music downloads through the iTunes online store, according to a report in today’s Wall Street Journal.

The move does not mean, however, that Universal will remove its catalog from iTunes immediately. Rather, the world’s largest music company is expected to arrange a short-term sales agreement.

Though it is unlikely to have any major effects immediately, the change will give Universal more flexibility in its dealings with competitors to iTunes — for instance, Universal could offer other digital retailers parts of its catalog exclusively.

The major record companies of late have been increasingly uncomfortable with Apple’s growing clout in the music retail business, as consumers have shifted from buying physical CDs to digital downloads. Apple had no comment late Sunday.

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