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Looming Royalty Decision Threatens iTunes Store, Apple Hints

Posted by timothy on from the but-each-penny-is-only-wafer-thin dept.

eldavojohn writes "You may recall us discussing some legislation about online music. More decisions are being made that may affect how much money Apple must impart to labels and musicians. Right now, it's 9 cents a track — which adds up, when you sell 2.4 billion tracks each year. The Copyright Royalty Board is asking for 15 cents a track (66% increase) and Apple isn't going to agree." Reader scorp1us points out a similar article at CNN; both stories mention that Apple has intimated such a change might cause a complete shutdown of the iTunes Music Store. Update: 10/02 21:03 GMT by T : According to CNet, the rate has been officially frozen at 9.1 cents per track.

4 of 279 comments (clear)

  1. A complex game by stox · · Score: 5, Insightful

    Apple is playing chicken with the Music Industry, and IMHO, rightfully so. The record companies should eat the increase in the royalty instead of passing it on to the consumer. They provide little value for the huge portion of the income they get already.

    --
    "To those who are overly cautious, everything is impossible. "
  2. Price breakdown by Elfboy · · Score: 5, Insightful

    Apple pays an estimated 70 cents of every dollar it collects per song to the record companies responsible for each track. The record companies turn over nine cents to the music publishers who control the copyrights to these tunes.

    So why can't the record companies absorb the extra 6 cents? Oh wait. They're greedy bastards...

    --
    * We dance where angels fear to tread *
  3. Why would this apply to already purchased music? by argent · · Score: 5, Insightful

    Essentially, I'm guessing the RIAA will pressure Apple into releasing or updating their client software to not decrypt the DRM'd songs (non iTunes Plus tracks) until the user coughs up the additional six cents.

    Why on earth would this apply to songs you've already bought? This is an additional royalty for new songs, making them cost 1.05 or making Apple push back on the labels to take the extra royalty out of their share...

    Yes, you definitely need to turn "Rip Mix Burn" around to "Mix Burn Rip" and get CDR backups of all your iTunes music ANYWAY.

    But at least iTunes DRM is "honor system" level... I mean, really, it gets downloaded unencrypted and the DRM is applied by the local client. And they haven't made any attempt to close the digital hole. Imagine how much it would suck if the labels had gotten everything they wanted from Apple like they have from Microsoft?

  4. Re:Problem is by sexconker · · Score: 5, Insightful

    By "magical" he means there is no logic involved, and people are idiots.