Microsoft to pay Universal Music for each "Zune" player

In a pretty surprising development, Microsoft has agreed to pay Universal Music a fee for each of their Zune players. For each machine sold, the company will be paying "more than" $1 to Universal Music on the assumption that the player will be used to host music that has not been paid for.

The formula for these proceeds will be calculated based on the number of Zune units that eventually sell through to consumers as opposed to those sitting on store shelves.

According to David Geffen:

Each of these devices is used to store unpaid-for material. This way, on top of the material people do pay for, the record companies are getting paid on the devices storing the copied music.

The end result is that even if your Zune player only has independent music or legally purchased or ripped music, you will be paying Universal regardless.