MUSIC NEWS - Apple has threatened to shut down itsiTunes music store should the USA federal government and a little known three-person board appointed by the Librarian of Congress raise the royalties paid to publishers and songwriters by six cents per song. The Copyright Royalty Board is due to hand down its decision on these rates today (10/2/08). As part of their general drum thumping lately, music publishers have asked the board to raise royalties paid to publishers and songwriters for the sale of digital downloads from 9 cents to 15 cents per song. Apple's on record vehemently opposing the move. In a statement to the board last year, Apple threatened to shut down iTunes rather than raise the price of songs so to afford the higher royalty rates. "If [iTunes] was forced to absorb any increase in the ... royalty rate, the result would be to significantly increase the likelihood of the store operating at a financial loss - which is no alternative at all," iTunes vice president Eddy Cue wrote. See story from Wired, here. Who knows if they are serious about the threat, considering how vital the store is to their overall operation/revenue and iPod sales. We should know by the end of this week!
UPDATE 10/3/08- The CRB ruled in Washington, DC yesterday (October 2). The CRB declined the request to increase royalities. Apple was pleased!
Apple's application to decrease the rate to 4.8 cents per song was also refused, but the board agreed to freeze the rate at 9.1 cents for the next five years! Apple spokesman Tom Neumayr said the company was happy with the outcome. "We're pleased with the CRB's decision to keep royalty rates stable," he said. As a result, service at the iTunes store was NOT interrupted.