Apple threatens to shut down iTunes if royalty rates rise
 

Apple says it has its finger on the big red button and it'll go nuclear if Hollywood and Washington push through higher royalty rates for digital music tracks... a move which may be imminent. Right now Apple pays 9 cents per track it sells to music publishers. Publishers want to hike rates up to 15 cents per track. (That would raise Apple's total payout to various music rights holders from 70 cents to 76 cents per track.) How will it end?

Last year Apple said that closing its phenomenally popular iTunes Music Store would be preferable even to raising prices on downloads. Tomorrow the Copyright Royalty Board is finally expected to rule on whether the National Music Publishers Association can raise its rates, which would force Apple to either back down from its threat or to suck it up and either swallow the added costs or, gulp, raise prices.

Apple of course has the power to make its voice heard here, and the industry must be cringing over whether Apple will back up its threat with action. Apple's iTunes is now the #1 retailer of music in any format, online and off. It even outsells Wal-Mart now.

But is Apple really that crazy? The company is set to sell about 2.4 billion songs this year, dominating the market it pioneered and doing so profitably. Would Apple really cede the market to other competitors like Amazon? Apple hasn't commented lately on its previously outlined threat, though it has also petitioned the Copyright Royalty Board itself: Apple actually wants publisher rates to go down, from 9 cents to 4.8 cents per track.

What will happen? It's all in the lap of the Copyright Board right now. But even if the rate hike does go through, it's hard to imagine Apple shuttering iTunes out of principle. The company's being beat up in the market right now as demand has softened for expensive, high-end computers. If it ditched iTunes, what would it have left?

This is old news..... which has already been posted.

They can't pull the plug and everyone knows it.

That would cause a crazier riot than if Obama loses the election.

didnt know it has been posted before just saw this on yahoo :)

I have still not bought a song.. I just download apps and podcasts!

definitely. if anything, they will raise the rates up a few cents per song. IMO, apple probably wants this to go through so they have a reason every year to raise the price of music by one or two cents

It's an idle threat. Apple is making so much profit on iTunes that they can afford 6 cents more.

$0.99 per song is roughly what a CD costs in a retail store now. Apple cuts out the cost of: 1) the CD case 2) the case liner, 3) buying and burning the CD, 4) shipping the CD to the point of sale, and 5) all the overhead of a network of retail stores. And they want you to believe they can't afford to pay 6 cents more to the artist?

Would be interesting.. Would it also no longer release the lock on songs already downloaded?

good, fuck the RIAA and the labels, raping the artists to death

Trust me that extra 6 cents won't be going to the artist.

its not going any where

Exactly if the money was going to the artists that would be one thing, but we all know there is no chance that happens.

that can't be real so apple sells a song for 99 cents and only pays the artist 9 cents of royalty.
and i thought the record companies raped the artist

Let them shut it down.

We'll just get our songs the old fashioned way - Peer-2-Peer.

Fucking RIAA bastard motherfucking cocksuckers.

i hate steve jobs

If they only pay 9 cents to artists, where the rest 90 are going?

prices will just go up

same here - loving the podcasts :thumbsup

another idea is ask the customer if he wants to add a few cents for the artists, most will say 0 but some will say 15 cents 50 cents etc and it will all add up, like a donate button

Um, this is old news, it didn't happen, so calm down eh?