14 DAY TRIAL // Various reports claim Apple has threatened with pulling the plug on the iTunes Store, should a ruling expected tomorrow force the company to pay more to music makers for each downloaded track.
According to The National Music Publishers' Association, songwriters in the US should get between 9 to 15 cents more for each track downloaded. The Copyright Royalty Board (CRB) in Washington DC will decide whether or not to grant the request of American music publishers to increase royalty rates on songs bought from online music stores. iTunes is one of them. The new fees should apply following expiration of a previous deal, signed last year.
Apple pays around 70 cents from every dollar to the record labels. In their turn, the record labels hand over nine cents per track to the music publishers who control the copyrights to the files.
The Cupertino-based iPod maker is utterly opposed to the move, saying that "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." Vice President of iTunes, Eddy Cue, added in his statement to the ruling body last year that "Apple has repeatedly made it clear that it is in this business to make money, and most likely would not continue to operate [iTunes] if it were no longer possible to do so profitably."
While Apple bosses are yet to speak their minds on this, it is hard to believe the company will shut down iTunes, rather than have the customers pay more for each track downloaded. Music labels are also against raising royalties, and it is unlikely they will choose to absorb the extra cost. So, if anything, Apple will charge more for the music it holds on the iTunes Store, but will almost certainly not shut down the service.