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News
Vote Leaves Music Royalties Intact, iTunes Safe
Thursday, October 2nd, 2008 at 4:00 PM - by Jeff Gamet
The U.S. Copyright Royalty Board voted on Thursday to leave the current royalty payment rates in place instead of raising them to 15 cents per song, up from 9 cents. The decision lets Apple off the hook after the company threatened to close down its popular iTunes Store if the rate increase was pushed through.
According to MarketWatch, the National Music Publishers Association had been pushing for the royalty rate increase for CD and digital music download sales claiming the extra money would go to artists. Online music resellers, however, felt that the change would force prices up and negatively impact sales.
Apple made its position on the rate increase very clear when iTunes boss Eddie Cue told the Copyright Royalty Board "If the [iTunes Store] 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. Apple has repeatedly made it clear that it is in this business to make money, and most likely would not continue to operate [the iTunes music store] if it were no longer possible to do so profitably."
Since the board chose to leave the current rates in place, Apple won’t have to decide whether or not to shut down its online music and video purchasing service, which means that iPod and iPhone owners that rely on the online store can breathe a sigh of relief.
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