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Copyright Royalty Board leaves download royalties unchanged

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By Charles Starrett

Contributing Editor
Published: Thursday, October 2, 2008
News Categories: iTunes

The Copyright Royalty Board has issued new guidelines which leave the royalty rate for digital downloads at 9.1 cents per song sold. As a panel of three federal judges that sets the royalty rates paid by record labels to music publishers and songwriters for the sale of CDs or digital downloads, the Board had been under pressure from the National Music Publishers Association to raise the rate to as high as 15 cents per song, a proposal that Apple had openly opposed.

“If iTS (iTunes Store) were forced to absorb any increase in the mechanical royalty rates, the result would be to significantly increase the likelihood of the store operating at a financial loss - which is no alternative at all,” Eddy Cue, Apple’s vice president of Internet Services, told the Board in April 2007. “Apple has repeatedly made clear that it is in this business to make money, and would most likely not continue to operate iTS if it were no longer possible to do so profitably.” The threat was apparently not further substantiated over the last year and a half, in which Apple became the country’s largest music retailer, a fact which would have made a shutdown of the iTunes Store extremely unlikely. Additionally, the board for the first time set a royalty rate of 24 cents for ringtone sales, which were not covered under the group’s previous guidelines.

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Comments

1

I was kind of hoping Apple would drop out of the music business.  No I don’t have anything against iTunes because I love to get DRM free tracks from the iTunes store.  However my thought is if Apple was to drop out of the music business, they would likely be more open to allow other music stores to put out there own store apps on the Apple mobile OS platform.  Those people that don’t have a Apple mobile device (IE iPhone / iPod Touch) can be redirected to other online music stores as well.  Wouldn’t it be nice if you could just buy your mp3’s from any music store you wish right on your iPhone or iPod Touch?  That will never happen as long as Apple stays in the music business..  Until they can offer all their music DRM free, I could only hope the music store go’s under.

Posted by Phoenixfury on October 3, 2008 at 9:48 AM (PDT)

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