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Updated: Universal Will Not Renew Long-Term iTunes Deal; Seeks Flexibility: Report

Update: The NYT is reporting that Universal notified Apple last week it would not renew its annual contract for the iTunes Store, “according to executives briefed on the issue who asked for anonymity because negotiations between the companies are confidential.” Universalw instead will market “at will” — allowing rapid removal if Universal and Apple don’t agree on something. The paper says SonyBMG is opting for the one-year renewal. No comments from any of the companies.

Original: This looks a lot like a trial balloon but it’s an indication of how fast the digital landscape is shifting … according to the WSJ, Vivendi’s Universal Music Group is considering seeking a short-term — less than a year — deal with Apple’s iTunes rather than renew a long-term contract. Universal wants flexibility, a concept Steve Jobs seems to associate with greed.

EMI found a way to move beyond Jobs’ $0.99 per song by offering premium DRM-free music. So far, it’s the only one of the four majors to do either. Meanwhile, Universal’s Doug Morris has been opting for the tough guy approach in other situations, winning concessions from Microsoft on Zune royalties, for instance. Will it work this time?