What problem does iPod and Zune have in common - the music piracy issues that crop up with file sharing through their respective wireless devices. Piracy situation is somewhat diffused now that Microsoft has clinched a licensing deal with Universal Music by agreeing to pay royalty on sales of the Zune.

Microsoft is also in talks with other record labels and this is a major headway against the established iPod of Apple. Chris Stephenson, general manager of global marketing for Microsoft Entertainment, said that a royalty-based licensing deal should provide it with more freedom to allow song-sharing or other promotions.

Universal will keep part of the royalties for its own corporate profits, while the remainder will be passed on to its roster of artists, which includes Eminem and U2. The exact financial details were not disclosed, although Universal is expected to receive more than $1 for each $250 device sold.

The groundbreaking deal with Microsoft will become a template for the industry, according to Doug Morris, chief executive of Universal Music, Universal’s deal to supply songs to Apple’s iTunes music store expires next year, and the company is expected to try to demand a similar cut of iPod sales.