Shutting down iTunes?

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The National Music Publishers Association, a trade group representing music publishers, has presented a proposal to the Copyright Royalty Board, the three-judge panel that determines royalty rates and copyright terms in the U.S., that would see the royalty rate for digital music sales paid to music publishers increased to 15 cents per track. The move comes after the expiration of a ten year agreement that had set the royalty rate for all music sales at the current rate of 9 cents for each song. The board’s forthcoming ruling, expected Thursday, will set the rate for the next five years.
Macworld

This means that a single song download would cost Apple more which would force it to increase its current 99 cents price. However, Apple will not agree to the increase in royalty rate since it would drastically lower the digital music sales. Hence, if the proposal would be approved, Apple is threatening to shutdown iTunes.

According to Fortune, Apple pays 70 cents to the record companies for every song it sells who in turn pays 9 cents to the record publishers who own the copyrights. With the increase in the royalty, Apple will only have 23 cents left to finance iTunes’ operations since the record companies would not likely to absorb the said increase. Hence, such a situation could lead Apple to operate in the negative that shutting down iTunes would be the best alternative.

We know how it is when prices are up….there are a lot of ‘alternatives’ in the net. As such, music industry’s sales would significantly be reduced. And we are talking of ALL forms of media.

Well, let’s see.

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14 thoughts on “Shutting down iTunes?

  1. This news is just hilarious for ITMS users. Honestly, record companies are becoming less and less relevant thats why they want their piece. I really would want to see Apple play hardball with these losers.

    Demand and shutdown, then download illegally, sino talo??

    just my 2 cents..

  2. yeah, i agree. it would be the biggest loss of these record companies.

    kahit ngayon. who would want to buy a CD at P375? even for P150? except maybe they are hardcore fans of the recording artists.
    🙂

    this is 5 cents worth. heheh

  3. with the new iPod lines and iPhones, iTunes will not shutdown.

    this is my 99 cents worth.. 🙂 isa na lang piso na.

  4. that means they will be raising their prices? unless Apple is willing to shoulder that increase in royalty fee. and i think that would hold true with other media, e.g. movies, tv, podcasts, etc.

    i think there will be a compromise. or Apple will really play hardball with these record companies and publishers. they couldn’t just disregard the market share of iTunes.

    BUT,

    if the cost (granting there is actually an increase)of distributing digital music media becomes so high (because the current 99 cents would be the tolerable rate for the market), it is highly possible that iTunes’ prices will be increased. it’s just the natural process. so what would the people do?…..:)

    Piso. LOL

  5. buti na lang hidni ako mac user. nonetheless, tama si alouie, kahit saang perspective mo tignan..sila pa rin ang talo!

  6. I agree with Louie, I mean the main reason why most people buy them “legally” over at iTunes is because it’s cheap, well if they increase the rate, duh, why should I buy it, when I can get it for free??? It’s actually a good thing that people are buying their stuffs, legally.

  7. Just a thought: time for certain changes in the music industry? If the record companies which are irrelevant now that the trend (actually the bulk of the business now) is digital distribution, then should the publishers go direct to retailers such as iTunes? Such that the retail price would be even lower because the 70 cents will be eliminated?

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