Apple iTunes to shut down if charged higher royalties

Apple iTunes to shut down if charged higher royalties
Talk about a bold statement coming from an industry leader! A ruling is expected today by the Copyright Royalty Board that, if passed, will raise royalties for online music sales from 9 to 15 cents per track. Needless to say, Apple isn't happy about the potential outcome, however they have threatened to shut down the iTunes store entirely if saddled with the additional fees.

"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," iTunes vice president Eddy Cue wrote in a statement to the ruling body last year. He went on to say 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."

Though it sounds like a bold claim, industry analysts aren't entirely sure as to whether the store will actually be shut down. They added that, with the integration of iTunes into industry consumer goods such as the iPod and iPhone, the idea of entirely shuttering the service is remote. However, they added, Apple is keeping the "nuclear" idea of shutting down the store as an option. Should Apple choose to absorb the rise in costs, they would do so for quite a bit of time, as the CRB's ruling would set royalty rates for the next five years.

Source: TimesOnline via TUAW

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18 Comments

1. unregistered

Apple won't shut down Itunes. Its only a threat but they are too smart to shut it down.

2. Anomalies

Posts: 61; Member since: Jun 08, 2008

Bad form Apple, bad form I say!

3. unregistered

If they do so they will be shooting themselves on the foot

4. unregistered

i agree with eddy cue. why keep a store open that isn't profitable? thats why apple has been so successful. i admit i would miss the podcasts but thats about it, i download my music illegaly still just like most, so as long as the itunes program still works for ipods and such i'm fine with the outcome.

8. unregistered

I understand it no longer being profitable but how many ipod sales will they loose to Zune and other portable music palyers if they shut it down? Why can't they just up increase the fee to download a song from $0.99 to $1.05? That cover the increase they pay and it is pasted on the public. Inflation is a bia! I myself have never purchaed anything from itunes but did use it to burn cds before MP11 was released and have a 30gig ipod but lod it with either ripped music or music downloaded else where.

5. unregistered

this really doesnt belong on a site like this. yes, i understand that the iphone uses itunes, but this isnt phone news

6. unregistered

nevertheless, its relevant. The whole concept of the iphone is an ipod on your phone. So, without itunes...

10. unregistered

without itunes what? you can get your music elsewhere, which is what most people do anyway?

11. unregistered

Its ok this person just needs something to B**ch about, they have nothing better to do.

16. unregistered

lol why pay, when you can get it for free

7. unregistered

keep in mind that if they shut it down....its only going to affect your purchases of songs...not the program itself...apple would not suffer any huge loss from it if the itunes store is not turning a profit anyway...you can already take music from somewhere else and convert it into itunes to put on your precious ipods and iphones. its all just a cost factor for apple.

9. unregistered

This is the biggest bunch of bull I've heard in a long time! Talk about empty threats. Apple would simply pass along the increase to the consumer. Get ready for $1.25 songs.

12. unregistered

Yet one more reason to hate Apple. They will get their's one day. When all the lemmings of the world have walked off the Apple cliff and died, Apple will go broke and Steve Jobs will just roll around in the money he has stashed away. His employees will not be able to feed their kids but he won't care. He's already screwed so many people financially that he will be rich till he dies. $1200 for a crappy laptop? C'mon guys! Get a clue!

13. apple fan boy unregistered

its a laptop that comes in colors bro! can match your i pod! its 1200 dollars well spent even thou all i do is blog and email but who cares it looks cool bro! i dont do graphic design or do anything usefull on it but i look cool on it when im on it thats all that matters! bro! can you spare a dolla bro im broke

17. unregistered

haha great, its so slim, its even easier to break...The new MacBook haha, there is a great slogan right there.

14. Pekn unregistered

Blah itunes. Apple should just get burried. They are acting like some movie star sueing anyone who even eats an apple. I don't even need to steal music anymore, you can get it free from ruckus with a .edu email account.

15. unregistered

come on~ who will believe the "shutting down" bull*~ non profitable??? LOL, its Apple!!!! they will squid our money in every possible way~~and yet it worth, we have no doubt that their products are good.

18. unregistered

and then they will release a software with different name

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