Sign In
SHARE
Email Confirmation
Oct 2 2008
2:27PM
EDT
Apple Threatens to Shut Down iTunes Over Royalty Hike
Andrea Chalupa reports: Apple is threatening to close down iTunes if music publishers win their day in court today.
Three Washington judges are set to rule today on whether music publishers are owed a bigger cut from sales through online music retailers like iTunes.
Right now iTunes hands over 9.1 cents per song in royalty fees and publishers are hoping to raise them to 15 cents per song. Publishers argue that the lower cost of producing digital goods means greater revenue to go around that should be shared.
Meanwhile, the Digital Media Association (DiMA), major labels, and Apple are fighting to lower royalty fees to 4.8 cents. Apple says that their 99 cent price point cannot absorb the 6 cent hike.
Eddy Cue, vice president of iTunes, said in a written statement to the Copyright Royalty Board back in April of 2007, "Apple has repeatedly made 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."
Cue further argued that a fee hike would hurt sales, scare away customers and lower payments to artists. Apple has sold over 5 billion songs through iTunes. Fans of the store are hoping this is an empty threat in a PR battle against the court case. Everyone knows C.E.O. Steve Jobs is a big music fan and wouldn't want to leave his iPod customers out on a lurch with no place to buy music online except for Amazon.
Three Washington judges are set to rule today on whether music publishers are owed a bigger cut from sales through online music retailers like iTunes.
Right now iTunes hands over 9.1 cents per song in royalty fees and publishers are hoping to raise them to 15 cents per song. Publishers argue that the lower cost of producing digital goods means greater revenue to go around that should be shared.
Meanwhile, the Digital Media Association (DiMA), major labels, and Apple are fighting to lower royalty fees to 4.8 cents. Apple says that their 99 cent price point cannot absorb the 6 cent hike.
Eddy Cue, vice president of iTunes, said in a written statement to the Copyright Royalty Board back in April of 2007, "Apple has repeatedly made 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."
Cue further argued that a fee hike would hurt sales, scare away customers and lower payments to artists. Apple has sold over 5 billion songs through iTunes. Fans of the store are hoping this is an empty threat in a PR battle against the court case. Everyone knows C.E.O. Steve Jobs is a big music fan and wouldn't want to leave his iPod customers out on a lurch with no place to buy music online except for Amazon.
See more in
Loading...
Thank you for registering as a Portfolio.com Insider. Your comment has been added.
Create Your Public Profile
Recent Blog Posts
- First Bytes: SEC Eyes Tweets, Waiting on a Verizon iPhone
- Apr 27 2009 9:10AM EDT
- Last Bytes: A New MySpaceFace, Technological Necessities
- Apr 24 2009 5:22PM EDT
- What the One Billionth Downloader Won
- Apr 24 2009 2:37PM EDT
- The End of Innocence at Apple
- Apr 24 2009 11:25AM EDT
- First Bytes: Social Videos, 1 Billion Apps, Mt. Everest Calls
- Apr 24 2009 10:23AM EDT
- Last Bytes: Microsoft and Amazon, Two Tales of the Economy
- Apr 23 2009 5:40PM EDT
- Dell's Plastic Surgery
- Apr 23 2009 3:12PM EDT
- Why High Tech Needs the Wall Street Quants
- Apr 23 2009 11:20AM EDT
- First Bytes: New Blood at MySpace, Steve Jobs Testimony
- Apr 23 2009 9:05AM EDT
- Last Bytes: Apple Profit Soars; eBay Profit Falls
- Apr 22 2009 5:04PM EDT
- Earth Day Special: Gadgets to Green Your Lifestyle
- Apr 22 2009 1:52PM EDT
- First Bytes: Cyberspies and Belgian Bots
- Apr 22 2009 9:55AM EDT
- Last Bytes: Is Texting Passé? Not Yet.
- Apr 21 2009 5:52PM EDT
- Happy 20th Birthday, Game Boy
- Apr 21 2009 4:11PM EDT
- Gaming Geeks (and Curt Schilling) Unite!
- Apr 21 2009 12:43PM EDT
Archive
Jul
2009
Categories
Links
- Kevin Maney's site
- TechCrunch
- GigaOM
- Engadget
- USA TODAY Tech
- Romenesko
- BuzzTracker Tech
- Roger McGuinn's Folk Den
- Maney's band on MySpace
- Spiedies, mmmm
- Somewhat Frank's tech conference list
- Marc Andreessen
- Mark Cuban's blog
- Tom Foremski
- Fred Wilson
- Pandora
- SciTech Daily
- Todd Bishop's Microsoft Blog
- Steven Johnson
- The Long Tail
- paidContent
- John Battelle's SearchBlog
