This makes me want to download some Top 40 music illegally. I haven't downloaded music illegally or indeed at all in months*, and most Top 40 tunes aren't my thing, but just out of spite.
Just so we're clear, Microsoft is selling Zune players empty of any Universal-branded material, and UMG still demanded a cut. Why? Because these devices are just repositories for stolen music, and they all know it.
Aside from being childish and irrational on the part of the music companies, this is an upsetting precedent. What we have here is one large company (Microsoft) agreeing to presume the guilt of its customers, and change it's business practices because of that, all at the behest of other large companies. The idea that they're operating on a faulty premise, or that even if true their conclusion is bizarre, seems to have never entered the equation.
Well, maybe it's irrational in the sense of "the arguments backing it up are bad logical constructions," but it's not irrational on the part of the music companies at all. One company won a court battle (estimated cost: varies greatly, but a one-shot expense that's over with) and now it gets a cut of sales of someone else's product (estimated value: more than one dollar for every Zune sold ever, plus the creation or reinforcement of a precedent, which might be far more lucrative) for not actually producing anything of their own. Sounds like a great racket if you can pull it off. And caving on this doesn't really hurt Microsoft. They'll just raise the retail price a bit or take a little bit more out of a subcontractor, and it's not like they have a reputation for consumer-friendliness to waste. It makes perfect sense for them if they can get away with it. It's just a crying shame that they did.
Ezra Klein posts a lot about the idea that how we relate to (businesses like) Wal-Mart is the most important decision facing the country. Radley Balko posts a lot about law enforcement with too much power, or irresponsible use of the power they have, or a culture or set of leaders that give them that power. I don't mean to downplay important issues like that by posting about copyright law, but people fiddle with details in labor laws and degrees of protectionism in economic policy while certain oligarchs have become honest-to-god robber barons of their private domains with relatively little fanfare. This is not good.
* Tangent: technically I have, via music videos on YouTube. But in a practical sense, I haven't, because if there's any way to access those files on my hard drive I don't have a clue what it is, and certainly not easily. I'm surprised the language doesn't already make a distinction between downloads that by default become yours permanently, and things that are technically downloaded but might as well come from a library. Come on all you early adopters out there, somebody coin a term!