Microsoft on Wednesday said it had reached what is a paradigm-altering agreement to give Universal Music Group a cut of revenue from the sales of its new portable media player - and that it would offer similar deals to others.

Vivendi's Universal Music will receive the Zune royalties in return for licensing recordings for Microsoft's new digital music service, paying half of what it receives to its artists, reports the New York Times. The amount of the royalty is reportedly a bit more than $1 per $250 Zune player. Universal, the world's largest music corporation, will also receive a percentage of download revenue when Zune - the player and the music service - officially launches next week.

Microsoft rival Apple pays music companies for the songs it sells via iTunes - but does not share iPod sales with them. Apparently, music companies are attempting to make up for the lost CD sales to digital downloads, and so Universal believes it should get a cut on devices that may end up containing illegally downloaded music.

Some 95 percent of consumers' music files on iPods come from ripped CDs (theirs and others') and illegal file-trading networks, according to a recent study cited by the Times.

Under federal legislation passed in the early 1990s, the recording industry receives a royalty on sales of certain audio devices like digital-audio tape machines. In 1999, a federal appeals court ruled that an early digital music player, the Diamond Rio, was not covered by that law.