Universal Music declines long-term iTunes deal: source

Universal Music Group, the world's largest music company, has declined to sign a long-term deal with Apple Inc.'s iTunes music store, leaving open the possibility for exclusive deals with other services, an industry source said on Sunday.

Universal, which produces one in three albums sold in the United States, will continue to sell music via iTunes on a month-to-month basis, rather than be locked in to a two-year agreement Apple had proposed, the source said.

The music company could now agree to offer significant portions of its repertoire exclusively to new partners, potentially weakening Apple's dominant hold on digital music retail.

The two sides had extended a previous two-year agreement by 12 months last summer, and that deal expired last month, the source said.

An Apple spokesperson was not immediately available.

Universal is owned by French media giant Vivendi.