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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.

9 of 279 comments (clear)

  1. I Wanted More Anti-DRM Spin on This by eldavojohn · · Score: 5, Interesting

    Apple has intimated such a change might cause a complete shutdown of the iTunes Music Store.

    More importantly, what of the client software that interacts with the store? You know, the program that allows you to burn/listen/store "your" music?

    As the user who submitted this article, I would like to point out that they removed my DRM fear mongering from my original submission. As a geek it's my duty to squeal like a stuck pig when troubles a brewin' and I think there's a rude awakening looming for a whole ton of iTunes users.

    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. Hell, I have no way of knowing that this isn't already implemented in iTunes and Apple need only stop delivering the other half of keys to the clients to decrypt a user's data.

    And that's why DRM has failed, continues to fail and will always fail. Nobody read the EULA/TOS of iTunes and nobody understands that when you're "buying" the song for a dollar, you're not buying anything but the right to listen to that song for some undetermined amount of time. Here's a simple case: What happens to "your songs" when you die?

    Burn them to discs or convert them to an open format anyway you know possible, folks. That's the only advice I have--especially with this on the horizon. Buy Apple players, Amazon MP3s and look no further than the GPL for your software.

    --
    My work here is dung.
    1. Re:I Wanted More Anti-DRM Spin on This by Ironsides · · Score: 5, Informative

      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.

      Um, what? Are you trying to spin it such that people who bought the songs at 0.99 would have to pay another 0.06 in order to continue playing songs that they already licensed? That's not going to happen. Aside from violating the existing license, it would trigger a massive lawsuit against apple. The license for the existing songs has been paid, the terms can't be changed.

      --
      Fly me to the moon Let me sing among those stars Let me see what spring is like On jupiter and mars
    2. Re:I Wanted More Anti-DRM Spin on This by earlymon · · Score: 5, Informative

      Sorry for previous post, in my mind I totally hit preview instead of submit.

      As someone who has actually RTFA, Apple didn't hint that this change would shut down the iTMS - they said flat out that IF they ABSORBED the higher cost, THEN THAT would be so detrimental they'd have to shut down - and that there was NO WAY THAT THEY WOULD DO THAT.

      Expert fear mongering, indeed. Allow me to accurately paraphrase for you.

      1. Apple said that they wouldn't absorb additional costs - it was ridiculous to the point of causing an iTMS shutdown.
      2. Apple said that shutting down iTMS is ridiculous.
      3. The iTMS Terms of Sale is on the web. I'll post the link for those can read: http://www.apple.com/legal/itunes/us/sales.html
      4. Ditto for their Terms of Service: http://www.apple.com/legal/itunes/us/service.html
      5. NO WHERE DOES IT STATE THAT YOUR MUSIC PURCHASES ARE GOOD FOR "some undetermined amount of time."
      6. iTMS TOS is governed by the laws of the State of California, USA
      7. It strains reasonable imagination to the breaking point that any California court would uphold the insane scenario you present.
      8. Your DRM fear mongering seems to completely overlook Apple's historical stance on DRM. From the fossil record:

      From http://www.apple.com/hotnews/thoughtsonmusic/

      Perhaps those unhappy with the current situation should redirect their energies towards persuading the music companies to sell their music DRM-free. For Europeans, two and a half of the big four music companies are located right in their backyard. The largest, Universal, is 100% owned by Vivendi, a French company. EMI is a British company, and Sony BMG is 50% owned by Bertelsmann, a German company. Convincing them to license their music to Apple and others DRM-free will create a truly interoperable music marketplace. Apple will embrace this wholeheartedly.

      9. iTMS content continues to play when one has no connection to the internet.
      10. Point 9, above is an excellent simulation of the iTMS going out of business - there would be no internet connection to iTMS, your music would continue to play.

      You, sir, are a total fucking idiot.

      --
      Pathological kinda promises Path + Logical - but instead, you get stuck with pathetic.
  2. 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. "
  3. 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 *
  4. 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?

  5. Re:Amazing... by TheLink · · Score: 5, Interesting

    Yeah. There's this organisation in my country that goes around collecting money from restaurants etc.

    http://www.ppm.org.my/v2/downloads/quoteEN.jpg

    I wonder what happens if a restaurant only plays music that I compose (I'm not a member and the last I checked I am not getting any money or royalties from them).

    I also wonder where the royalties are really going and what the pie slices look like ;).

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

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

  7. Re:What, even eMusic? by sanyacid · · Score: 5, Informative

    Aside from emusic which rules for indie picks - with amazonmp3 out there, I can't understand why anyone would buy any drm music period any more.

    Let me clear this up for you:
    "Please note that Amazon MP3 is currently only available to US customers."