Microsoft agreed to pay Universal a fee for each new Zune player it sells.
The groundbreaking deal could redefine the digital music business pioneered by Apple Computer Inc. Rivals including cell phone makers eventually could pay for hardware sales as well as for the music itself, Universal said.
Microsoft is trying to break into an industry closely aligned with archival Apple, which is credited with nearly single-handedly building the legal Web music world with its iPod players and iTunes music store.
But Apple does not give a cut of sales of iPods to music companies. It only pays labels for songs sold on its iTunes music store.