When UMG forced Microsoft's hand and extorted gained a deal to get $1 per Zune sold as compensation for what UMG CEO Doug Morris calls "a repository for stolen music", it became a widely held belief that UMG beat Microsoft at the negotiating table. Microsoft, just days away from the Zune's launch _needed_ UMG's extensive catalog -- which includes labels and imprints such as Def Jam, Geffen, Interscope and Verve -- for the Zune Marketplace.

ZDNet's Jason O'Grady offers a different idea, "Why in the world would Microsoft agree to such a dangerous precedent? The obvious reason is that MS needed to get access to the Universal catalog. My favorite (and more dastardly) reason comes from Macalope who claims that Microsoft did it "to try to screw up Apple's business model.""

We're watching the beginning of a slippery slope. UMG won't be the last label to demand a royalty on hardware, and now that the precident has been set, Apple may be UMG's next target. Graver still, O'Grady posits that the movie studio's will be next, and offers evidence that they are already warming up to demand tighter DRM restrictions on movies bought from the iTunes store. How far will UMG go and, what that means for device manufacturers is still up in the air but, recent statements by UMG's CEO show that he's ripe and ready for battle.

[via ZDNet]