A lot of companies are frustrated at Apple's domination of the portable music and video market via the popular iPod, which has about 80% of the market for such devices. NBC recently announced it is pulling its TV programs from the iTunes store, and now Universal is going to distribute its music catalogue via SpiralFrog, which will compete directly with the iTunes store.
SpiralFrog and Universal have decided that the music it sells will NOT play on iPods. Apparently ego and stupidity have combined in some entirely new way at Universal, where they apparently think they can simply walk away from 80% of the market. Why would anyone buy music from Universal if it won't play on your music player and can't be stored with the rest of your music in the iTunes software on your computer?
One of the enduring myths of the iPod is that it will not work with music that is not purchased from the iTunes store. This is not true, and never has been. Another myth is that music purchased from iTunes won't play on anything other than an iPod. This is also not true, as you can simply burn a CD and play the music in any device that reads music CDs.
Apple gets beat up for its market share, but it actually has done a better job than most other online music vendors of trying to be fair to its customers. The music industry is still struggling with the sea change in the distribution of music, and the SpiralFrog/Universal partnership is yet another attempt by music executives to control customers. It is not likely to work.