[Infowarrior] - Music industry backs down over Itunes closure threat

[Richard Forno]

Music industry backs down over Itunes closure threat

The price is right... for the next five years

By Emma Hughes: Friday, 03 October 2008, 10:59 AM

http://www.theinquirer.net/gb/inquirer/news/2008/10/03/itunes-close

APPLE’S THREAT to close down Itunes seems to have done the trick in  
getting the Copyright Royalty Board to keep the price of royalties  
paid to record companies for downloaded music at 9 cents a song.

The Cupertino company threatened to close down the incredibly  
successful music marketplace if the decision went through to up the  
price of downloading songs from nine cents to 15, a 66 per cent price  
hike.

So, The National Music Publishers Association, which has been pushing  
for the rise in royalties for 18 months seems to have backed down, no  
doubt realising that, without the huge amounts of wonga put its way by  
Apple fans would leave it rather impoverished.

An Apple representative said, "We're pleased with the CRB's decision."

The CRB achieved a hollow victory by getting a proposed cut in the  
rate to 4.8 cents proposed by some vendors, coming to an agreement of  
9.1 cents a song for at least five years. We can't help but wonder how  
much cash went into the lawyers pockets over this whole shambles.

This decision has been pronounced by the NMPA as “a positive  
development for all songwriters and music publishers" and is the first  
time royalty rates have been mechanically decided for digital music.

Jonathan Potter of the Digital Music Association, which represents  
online music stores like Apple said, "Keeping rates where they are  
will help digital services and retailers continue to innovate and grow  
for the next several years. "

This move doesn’t come as much of a surprise, as Apple was highly  
unlikely to close the store – over the last five years it has sold  
more than five billion songs online, and that's a whole load of nine  
cents.

Digital sales figures show that songs and album sales rose by almost  
50 percent last year according to the Recording Industry Association  
of America. Meanwhile CD sales dropped 20 per cent to $7.4bn (£4bn).

Looks like our predictions were correct. Then again, the chances of  
Apple killing its cash cow were always pretty slim. µ