The new system differs from the current model pioneered by Apple, which only pays labels for songs sold on its iTunes music store and not for hardware sales. Some say the move could totally redefine the digital music industry, while Universal has claimed that even mobile phone companies could end up paying in a similar way.
There has been a call in some countries for an ‘iPod tax’ of this kind in the past, which would go someway towards reimbursing music companies who have lost revenue through illegal peer-to-peer file sharing sites. Meanwhile, Microsoft claim the scheme has been in the pipeline for sometime: “It’s not a new conversation, it’s been out there in the industry for a while,” said Chris Stephenson, general manager for global marketing at Microsoft Entertainment. “We’ve been careful in thinking about it from an economic point of view from day one.”
Microsoft will announce what the exact fee will be next Tuesday.