The U.S. Department of Justice has reportedly launched a preliminary investigation into “Total Music,” an idea originally floated in October of last year by Universal Music president Doug Morris. The basic idea: build the cost of subscribing to unlimited digital music for a fixed period of time into the cost of hardware players. Under Total Music, hardware makers would essentially by subsidizing the cost of subscribing to the music service; Universal has been talking about a subscription fee in the range of $5 a month, which would add about $90 to the cost of a music player expected to be in use for 18 months. Universal has been talking with other music labels in an effort to get them to back the idea.
According to the Wall Street Journal and other sources inside the industry, Universal and Sony BMG have been contacted by the Justice Department, which is seeking information on how a Total Music service would work, since it raises the spectre of price fixing. Music labels EMI and Warner Music have not been contacted, so far as we can determine.
So far, nothing significant has materialized from Universal’s Total Music idea, but is they service were actually to go forward, it could be a significant change for the digital music industry. Universal has made no effort to conceal its dislike for Apple’s iTunes store, and has been licensing its music (even in DRM-free formats) to just about any non-Apple venue that will take it. The label also managed to extract a $1 royalty on every Microsoft Zune sold, which has no doubt whetted the company’s appetite for a share of the digital music hardware market.
This also doesn’t mark the first time antitrust investigations have targeted the music industry: in 2000, the Department of Justice determined that music labels had engaged in price fixing, and investigated them again over complaints they backed two digital music services (PressPlay and MusicNet) while denying licenses to other services, although that investigation was eventually tabled.
