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Apple Threatens to Close iTunes Over Increased Royalty Rates
The problem is that someone, either the consumer, the record companies, or digital music resellers, will have to absorb the cost. Apple, in particular, is livid with the possibility of this increase. The purveyors of the iPod and the iTunes music store claim that they already pay 70-percent of the revenue from iTunes to the record companies and that the rate increase could cause iTunes to cease being profitable. If that became the case, Apple has said they would consider closing the iTunes store.
Apple believes that the rate increase would force them to raise prices, which would drive the number of purchases down. According to the Industry Standard Apple vice president, Eddy Cue, said "Apple... is in this business to make money, and most likely would not continue to operate [the store] if it were no longer possible to do so profitably."
It's hard to believe that Apple would simply shutdown a property that it has spent so much time and manpower developing, but the threat to close down the world's most popular digital music store is a significant one. Even if it's an empty threat. [From: Industry Standard]
Update:
Well, the CRB came back with a decision today that should make Apple (and RealNetworks, and Napster, etc...) very happy. The board voted to freeze the royalty rate at 9.1 cents per track, where it will stay for at least the next five years.
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Comments
5
Subscribe to commentsDarice GamacheOct 2nd 2008 4:24PM
Let them shut down. Maybe I would get a refund of the money I have sitting in an account I can't access because someone stole my computer and iPod.
IanOct 3rd 2008 1:39AM
that sucks man but u can use another computer...
DaveOct 2nd 2008 5:26PM
The Greed of the music industry never ceases to amaze me. A copywright should have expiration limits similar to a patent. The music industry is currently putting out garbage and they need to get to work and get some good music out here.
MemeOct 2nd 2008 11:57PM
Darice -- It is not Apple's fault that your items were stolen so why in the heck do you think that THEY should be punished for it? Stolen or not, you do have the items on your computer and Ipod and Apple has NO way to verify whether or not you are lying. Everyone could say that their Ipods were stolen and ask for refunds. That's why they sell insurance..you should have had insurance so you have no one but yourself to blame and NOT Apple so quityerbitchin.
Dave - I agree! I have the same problem with Paint Shop Pro items that many of us create from so- called Copyrighted materials. It's baloney..we DON'T sell it! The MUSIC industry has taken it WAY too far! They can never get enough no matter HOW much they get..sort of reminds me of that band that went under because they refused to have their music sold on Napster (can't think of the group's name).. makes a lot of sense, doesn't it? WHO was the big loser there??? Wasn't Napster..Someone lost a TON of their fans!
Marcia NeilOct 6th 2008 11:33AM
Royalty payments to writers and performers are counter to the copyright laws; royalty payments exist to benefit the artist/composer. The real issue lies in the fact that royalty payments are paid to people who have not created the music, but who perhaps have their names on original music because they have inspired it in some way. A significant portion of entertainment-industry 'writing' overall is ghost-writing that can be alleged to be organized crime.
Fees are paid to people who score raw all-vocal music so it can be used with instruments on-stage, but recordings can have listeners without any writing, scoring or stage performances.
Many companies seize new concepts and operate in a crisis-management mode as if the nation will be nuked if they are not busy stamping out new technology for the mass markets; in that way 'truth-in advertising' becomes a tangental thought rather than a real activity.
There is no reason to pay royalty fees to writers -- they have not created what they write out.