Here’s a story about how Microsoft cut a deal with Universal Music Group to get $1 for every one of the Zune mp3 players sold to compensate for music not paid for. According to the article from Om Malik and the NYT, they have extended similar offers to the other major labels.

Do they have this backwards? There have been those who have said that the licensing fees should be on the ISP end. This seems desperate and thuggish. I doubt that if you gave a buck to each of the majors for an iPod that they would be content with that. The article suggests this is a shakedown; I just don’t know if the music companies are cut out for the protection racket… oh wait, sure they are…