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Looming Royalty Decision Threatens iTunes Store, Apple Hints 279

Posted by timothy
from the but-each-penny-is-only-wafer-thin dept.
eldavojohn writes "You may recall us discussing some legislation about online music. More decisions are being made that may affect how much money Apple must impart to labels and musicians. Right now, it's 9 cents a track — which adds up, when you sell 2.4 billion tracks each year. The Copyright Royalty Board is asking for 15 cents a track (66% increase) and Apple isn't going to agree." Reader scorp1us points out a similar article at CNN; both stories mention that Apple has intimated such a change might cause a complete shutdown of the iTunes Music Store. Update: 10/02 21:03 GMT by T : According to CNet, the rate has been officially frozen at 9.1 cents per track.
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Looming Royalty Decision Threatens iTunes Store, Apple Hints

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  • by eldavojohn (898314) * <eldavojohn.gmail@com> on Thursday October 02, 2008 @03:34PM (#25237209) Journal

    Apple has intimated such a change might cause a complete shutdown of the iTunes Music Store.

    More importantly, what of the client software that interacts with the store? You know, the program that allows you to burn/listen/store "your" music?

    As the user who submitted this article, I would like to point out that they removed my DRM fear mongering from my original submission. As a geek it's my duty to squeal like a stuck pig when troubles a brewin' and I think there's a rude awakening looming for a whole ton of iTunes users.

    Essentially, I'm guessing the RIAA will pressure Apple into releasing or updating their client software to not decrypt the DRM'd songs (non iTunes Plus tracks) until the user coughs up the additional six cents. Hell, I have no way of knowing that this isn't already implemented in iTunes and Apple need only stop delivering the other half of keys to the clients to decrypt a user's data.

    And that's why DRM has failed, continues to fail and will always fail. Nobody read the EULA/TOS of iTunes and nobody understands that when you're "buying" the song for a dollar, you're not buying anything but the right to listen to that song for some undetermined amount of time. Here's a simple case: What happens to "your songs" when you die?

    Burn them to discs or convert them to an open format anyway you know possible, folks. That's the only advice I have--especially with this on the horizon. Buy Apple players, Amazon MP3s and look no further than the GPL for your software.

    • by Reivec (607341) on Thursday October 02, 2008 @03:40PM (#25237307)

      Anyone that buys DRM music deserves the backlash. I am one of those annoying guys that told everyone he knew to not use the legal music stores, not because I like to steal, but because they would surely find themselves unable to listen to the music they purchased. This has already happened to my cousin to bought through the walmart service, then had to reinstall her computer, then replaced her computer, and had all sorts of issues getting the rights to play her music again. I think she got that resolved, but you shouldn't even have to go through all that.

      I only listen to music not related to the RIAA and have done so for many years now. I find that I still find many songs I think are great and love to listen to, and never have to worry about being screwed over. And yes, I do buy CDs and songs, fairly often even.

      • What, even eMusic? (Score:5, Insightful)

        by argent (18001) <peter@slashdot.2 ... m ['nga' in gap]> on Thursday October 02, 2008 @03:50PM (#25237465) Homepage Journal

        I am one of those annoying guys that told everyone he knew to not use the legal music stores

        What, even ones like eMusic that don't ship DRMed music and never shipped DRMed music?

        That's not just annoying, that's irresponsible.

        • by Smeagel (682550) on Thursday October 02, 2008 @04:34PM (#25238145)
          Aside from emusic which rules for indie picks - with amazonmp3 out there, I can't understand why anyone would buy any drm music period any more.
          • by cyber-dragon.net (899244) on Thursday October 02, 2008 @04:49PM (#25238373)

            I buy things from iTunes knowing the risks of DRM specifically because it pisses off the RIAA and MPAA that they have to deal with Apple.

            It amuses me NBC caved and put their TV back on iTunes because they lost so much revenue.

            Am I wasting my money? Yeah probably. But lots of people also pay $10 to go to a movie for an hour and a half. I pay $2 an hour so seems like a half price entertainment deal, and I get to re-watch mine until something happens.

          • Agreed. Amazon makes it stupid easy now to buy DRM-free music. I would like it though if I could put my Itunes credentials into Amazon and it would suck my shopping cart/wishlist in so I could buy the music through them. I have about 150 sounds in my iTunes shopping cart, and just haven't had the time to go through 1 by 1 in Amazon to buy them.

          • by sanyacid (768747) on Thursday October 02, 2008 @05:08PM (#25238641)

            Aside from emusic which rules for indie picks - with amazonmp3 out there, I can't understand why anyone would buy any drm music period any more.

            Let me clear this up for you:
            "Please note that Amazon MP3 is currently only available to US customers."

            • Re: (Score:3, Funny)

              by Smeagel (682550)
              Wait - there's a world outside the states? j/k..I didn't realize it was still US-only.
      • Re: (Score:3, Insightful)

        by Duradin (1261418)

        Too bad the Apple has hardwired its authentication system to its ability to sell music...

        It's not like they could just stop selling music while keeping the authentication running. That'd be silly. That'd only happen if they sold other things than just music. Like applications or movies.

    • Essentially, I'm guessing the RIAA will pressure Apple into releasing or updating their client software to not decrypt the DRM'd songs (non iTunes Plus tracks) until the user coughs up the additional six cents.

      Why on earth would this apply to songs you've already bought? This is an additional royalty for new songs, making them cost 1.05 or making Apple push back on the labels to take the extra royalty out of their share...

      Yes, you definitely need to turn "Rip Mix Burn" around to "Mix Burn Rip" and get CDR backups of all your iTunes music ANYWAY.

      But at least iTunes DRM is "honor system" level... I mean, really, it gets downloaded unencrypted and the DRM is applied by the local client. And they haven't made any attempt to close the digital hole. Imagine how much it would suck if the labels had gotten everything they wanted from Apple like they have from Microsoft?

      • by b96miata (620163) on Thursday October 02, 2008 @03:59PM (#25237617)

        I'm honestly a bit confused by all this - Record companies seem to have no problem paying artists less than the statutory royalties via one-sided contracts. Apple has contracts with the record companies saying they get x per track/album sold.

        Near as I can tell, this bill will just change the "default" royalties.

        A direct contract with the copyright holder (nearly always the record company) tends to bypass this sort of thing.

    • Re: (Score:3, Interesting)

      by qoncept (599709)
      "they removed my DRM fear mongering from my original submission."
      "Essentially, I'm guessing the RIAA will pressure Apple into releasing or updating their client software to not decrypt the DRM'd songs (non iTunes Plus tracks) until the user coughs up the additional six cents."

      I'm assuming that's because what you said was unfounded, but more importantly completely ridiculous. You can't retroactively revoke access to something that was already sold when using the product doesn't rely on your services. And
      • by eldavojohn (898314) * <eldavojohn.gmail@com> on Thursday October 02, 2008 @03:53PM (#25237535) Journal

        I'm assuming that's because what you said was unfounded, but more importantly completely ridiculous.

        Yeah, completely ridiculous. Alright, here's the TOS [apple.com]:

        d. You acknowledge that some aspects of the Service, Products, and administering of the Usage Rules entails the ongoing involvement of Apple. Accordingly, in the event that Apple changes any part of the Service or discontinues the Service, which Apple may do at its election, you acknowledge that you may no longer be able to use Products to the same extent as prior to such change or discontinuation, and that Apple shall have no liability to you in such case.

        But it's completely ridiculous that I start to talk about them electing to discontinue your right to use the product. Completely.

        Couple that with the fact that Apple pulled the $1 pricing scheme out of it's ass as well as the RIAA being a legion of lawyers and I think we've got ourselves the perfect storm. Of course, that's just completely ridiculous.

        You can't retroactively revoke access to something that was already sold ...

        Nothing was sold. Something was "licensed" temporarily to you in the very loosest sense of the word. By saying "sold" are you saying I now own the rights to the music I buy on iTunes? No, it follows the TOS which I pointed out is full of red alarms.

        • by Creepy Crawler (680178) on Thursday October 02, 2008 @04:03PM (#25237659)

          That's why I pirate.

          Services that sell physical media have quantities of bad-ware and other anti-user software.
          Services that sell online media promise nothing, including playing tomorrow.

          Piraters guarantee good quality product that will 10 years from now. They also happen to be free.

          Media corps, give me a good reason why I should put MY money through a shredder and buy locked down, limited term, no liability media. If not, fuck off torrents, IRC, and sneakernet work great for me.

          • So I assume you buy CDs without "bad-ware and other anti-user software" when available? Or are you just a hypocrite?

          • Re: (Score:3, Insightful)

            by cowscows (103644)

            There are a number of places to buy non-DRM'd music, in both physical and digital form. Why don't you try those?

        • by qoncept (599709)
          "Nothing was sold. Something was "licensed" temporarily to you in the very loosest sense of the word. By saying "sold" are you saying I now own the rights to the music I buy on iTunes? No, it follows the TOS which I pointed out is full of red alarms."

          A license was sold. No restrictions based on time or due to future mishaps of the selling company are listed in that TOS. I'll bet you all of the money FEMA gave me you'll be able to listen to all of the songs you bought on iTunes for as long as you choose to
    • by Ironsides (739422) on Thursday October 02, 2008 @03:47PM (#25237419) Homepage Journal

      Essentially, I'm guessing the RIAA will pressure Apple into releasing or updating their client software to not decrypt the DRM'd songs (non iTunes Plus tracks) until the user coughs up the additional six cents.

      Um, what? Are you trying to spin it such that people who bought the songs at 0.99 would have to pay another 0.06 in order to continue playing songs that they already licensed? That's not going to happen. Aside from violating the existing license, it would trigger a massive lawsuit against apple. The license for the existing songs has been paid, the terms can't be changed.

    • by earlymon (1116185)

      Apple has intimated such a change might cause a complete shutdown of the iTunes Music Store.

      More importantly, what of the client software that interacts with the store? You know, the program that allows you to burn/listen/store "your" music?

    • by Angostura (703910)

      OK, I'll bite

      Nobody read the EULA/TOS of iTunes and nobody understands that when you're "buying" the song for a dollar, you're not buying anything but the right to listen to that song for some undetermined amount of time.

      I do actually read the EULA for the software and the TOS for the store, and I'd like you to point out the parts that suggest that to you, because it doesn't gel with

      Here's a simple case: What happens to "your songs" when you die?

      That, of course is the least simplest case, it would be inter

    • by earlymon (1116185) on Thursday October 02, 2008 @04:10PM (#25237773) Homepage Journal

      Sorry for previous post, in my mind I totally hit preview instead of submit.

      As someone who has actually RTFA, Apple didn't hint that this change would shut down the iTMS - they said flat out that IF they ABSORBED the higher cost, THEN THAT would be so detrimental they'd have to shut down - and that there was NO WAY THAT THEY WOULD DO THAT.

      Expert fear mongering, indeed. Allow me to accurately paraphrase for you.

      1. Apple said that they wouldn't absorb additional costs - it was ridiculous to the point of causing an iTMS shutdown.
      2. Apple said that shutting down iTMS is ridiculous.
      3. The iTMS Terms of Sale is on the web. I'll post the link for those can read: http://www.apple.com/legal/itunes/us/sales.html [apple.com]
      4. Ditto for their Terms of Service: http://www.apple.com/legal/itunes/us/service.html [apple.com]
      5. NO WHERE DOES IT STATE THAT YOUR MUSIC PURCHASES ARE GOOD FOR "some undetermined amount of time."
      6. iTMS TOS is governed by the laws of the State of California, USA
      7. It strains reasonable imagination to the breaking point that any California court would uphold the insane scenario you present.
      8. Your DRM fear mongering seems to completely overlook Apple's historical stance on DRM. From the fossil record:

      From http://www.apple.com/hotnews/thoughtsonmusic/ [apple.com]

      Perhaps those unhappy with the current situation should redirect their energies towards persuading the music companies to sell their music DRM-free. For Europeans, two and a half of the big four music companies are located right in their backyard. The largest, Universal, is 100% owned by Vivendi, a French company. EMI is a British company, and Sony BMG is 50% owned by Bertelsmann, a German company. Convincing them to license their music to Apple and others DRM-free will create a truly interoperable music marketplace. Apple will embrace this wholeheartedly.

      9. iTMS content continues to play when one has no connection to the internet.
      10. Point 9, above is an excellent simulation of the iTMS going out of business - there would be no internet connection to iTMS, your music would continue to play.

      You, sir, are a total fucking idiot.

      • Re: (Score:3, Informative)

        by petermgreen (876956)

        10. Point 9, above is an excellent simulation of the iTMS going out of business - there would be no internet connection to iTMS, your music would continue to play.
        Afaict the situation would be that you could still play it on machines already authorised but not on any new machines. You would then be faced with a choice of spending a lot of time and losing quality burning and re-ripping (which only works for music afaict not some of the other stuff itunes sells), using a drm crack (legally dubious and assumes

        • by earlymon (1116185) on Thursday October 02, 2008 @06:04PM (#25239355) Homepage Journal

          Point taken.

          I find that, despite the bait I may be setting for myself, the iTMS content is sufficiently downgraded in the first place by its low sampling. On a good audio system, you can hear the difference.

          I've spent a few decades of my life writing DSP software and teaching DSP techniques and Fourier and LaPlace math. I already lament sampling and have no choice but to agree that you're right. Fuzzily, however, few people seem to own decent audio equipment, many seem to flame being able to hear a difference, so to those people, the argument is lost - they wouldn't hear it. The others will more likely accept the new artifacts as different - technically inferior - but inferior_a is roughly equal to inferior_b. One would oversample the CD output (creating more digital artifacts) and then downsample the copy in an attempt to lose the new artifacts. There's no basis to belief that this creates lossless transfers, but does up the odds a bit in the user's favor.

          Another guy insisted that Apple would free us from DRM if they went under, but I find no citation for that as of yet.

          Please don't get me wrong - DRM is evil. IMO, Apple's DRM is the least evil - much like being preferred to be shot by a .22 instead of a .357 - it's still a freaking gunshot wound!

          My retort was focused on the fact that the sky is not falling and a single-shot .22 is not an A-10 attack.

    • Re: (Score:2, Interesting)

      by maxume (22995)

      DRM appears to be working fairly well for Apple (it was other players in the market that pushed for removing it, Apple seems happy enough with whatever the status quo happens to be).

    • Re: (Score:3, Informative)

      by 2nd Post! (213333)

      Um... because you're fearmongering?

      Try this: Buy an iTMS DRM track. Play it to verify it works. Disconnect the computer from the internet. Continue to verify that it works.

      See that? No DRM server.

  • by sexconker (1179573) on Thursday October 02, 2008 @03:36PM (#25237233)

    Yeah, right.
    Call their bluff, require 15 cents.
    iTunes Music Store isn't going anywhere.
    If anything, prices will go up a dime. (Yes, for a 6 cent increase.)

    • Re: (Score:3, Insightful)

      Well, the music industry hasn't exactly made the best moves regarding new technology and distribution methods. They could just be stupid enough to refuse to sell though iTunes if they don't get what they want...
    • Problem is (Score:4, Interesting)

      by Sycraft-fu (314770) on Thursday October 02, 2008 @03:58PM (#25237593)

      That $1 is a magic mental limit. You go over that, many people will no longer be willing to buy tunes. May seem silly but that's how it works. There are various mental limits when it comes to prices like that. There's been research done to suggest that if iTunes songs went up even to $1.10 it would result in a massive drop sales.

      • Re: (Score:3, Interesting)

        by splatter (39844)

        You are correct but there isn't anything magical about it it's called perceived value you study it in microeconomics.

        http://en.wikipedia.org/wiki/Customer_perceived_value [wikipedia.org]

      • That $1 is a magic mental limit. You go over that, many people will no longer be willing to buy tunes. May seem silly but that's how it works. There are various mental limits when it comes to prices like that. There's been research done to suggest that if iTunes songs went up even to $1.10 it would result in a massive drop sales.

        Hm. No, I call bullshit on that. The magic mental limit will be broken. Where else will people by music online for their magic $200 ipod? No... platform lock-in and the fact that th

        • Re: (Score:3, Insightful)

          by NormalVisual (565491)
          Where else will people by music online for their magic $200 ipod?

          Any place that sells unprotected MP3s. Apple is far from the only source for media that will work with the iPod. Apple is also quite aware that most people are capable of entering "http://www.piratebay.org" in their browsers, and more importantly, they know the labels are quite aware of that. Apple had no problem going to the mat with Universal/NBC, and I don't see them blinking here either, especially given the fact that NBC came crawl
    • Re: (Score:2, Insightful)

      by 91degrees (207121)
      If anything, prices will go up a dime. (Yes, for a 6 cent increase.)

      Probably wouldn't happen. 99 cents is a key point. It's at the significant "less than a dollar" amount. Reduce the price to 98 cents and sales would barely go up at all. Increase to $1 and sales would drop by substantially more than the 3.3% extra they make per track. There would probably be another drop if they went up to $1.01.

      Is Apple's share per song went to 24 cents, then a 10 cent increase would mean 41% more per track to
  • Amazing... (Score:4, Insightful)

    by paulevans (791844) on Thursday October 02, 2008 @03:37PM (#25237255) Homepage
    Our music in on iTunes, and they get a cut of it. Wow, Thanks Royalty Board! Thanks for taking more of our cut . . . for doing . . . nothing to help us.
    • Re:Amazing... (Score:5, Interesting)

      by necro2607 (771790) on Thursday October 02, 2008 @03:48PM (#25237447)

      Hmm good point. My band's music is on iTunes, as well as that of tons of other bands I know, who are completely independent. We got our stuff onto iTunes through TuneCore who charge a pretty nominal yearly fee. No record label involved. They also don't take any cut of royalties sent from Apple. So, if any of that $0.99 is going to anyone other than either Apple or my band, somethin is screwed up there :P

      • As artists find more ways to get exposure of the same level that the RIAA used to provide, they're going to be more and more disincentivized to utilize record companies. They'll look to companies that provide the ability to sell the songs over the net, to whatever device, without basically assuming ownership over it.

        In the near term, as the RIAA thrashes, royalties will go up. They need to maintain their profits somehow. That increase in cost to the consumer, though, will drive new market strategies that wi

      • Re: (Score:3, Insightful)

        by CodeBuster (516420)
        I thought that the law (in the United States) says that all royalties must be paid to SoundExchange corporation which then distributes them to the copyright owners (your band in your case) although I have also heard that they are notorious for not lifting a finger to find out where to send the royalties in the case where the copyright owner (who may not even know that they inherited the right to receive royalties) does not show up and ask for them and even then they tend to give individuals and small indepe
    • by Ironsides (739422)
      Apple pays an estimated 70 cents of every dollar it collects per song to the record companies responsible for each track. The record companies turn over nine cents to the music publishers who control the copyrights to these tunes.

      In other words, if you are a music artist as you seem to imply, you would get more money per song from this. The only question is where it comes from.
    • Re:Amazing... (Score:5, Interesting)

      by TheLink (130905) on Thursday October 02, 2008 @03:51PM (#25237483) Journal

      Yeah. There's this organisation in my country that goes around collecting money from restaurants etc.

      http://www.ppm.org.my/v2/downloads/quoteEN.jpg [ppm.org.my]

      I wonder what happens if a restaurant only plays music that I compose (I'm not a member and the last I checked I am not getting any money or royalties from them).

      I also wonder where the royalties are really going and what the pie slices look like ;).

  • A complex game (Score:5, Insightful)

    by stox (131684) on Thursday October 02, 2008 @03:40PM (#25237297) Homepage

    Apple is playing chicken with the Music Industry, and IMHO, rightfully so. The record companies should eat the increase in the royalty instead of passing it on to the consumer. They provide little value for the huge portion of the income they get already.

  • Price breakdown (Score:5, Insightful)

    by Elfboy (144703) on Thursday October 02, 2008 @03:43PM (#25237353)

    Apple pays an estimated 70 cents of every dollar it collects per song to the record companies responsible for each track. The record companies turn over nine cents to the music publishers who control the copyrights to these tunes.

    So why can't the record companies absorb the extra 6 cents? Oh wait. They're greedy bastards...

  • Good (Score:5, Insightful)

    by superdan2k (135614) on Thursday October 02, 2008 @03:44PM (#25237367) Homepage Journal
    I think what's going to get missed in this is a "good for Apple!" variety of statement. They've created a whole new market for music, and provided a whole new revenue stream for the industry. That they've stood up to that industry previously on the issue of cost-per-track is admirable. Now they're willing to drop a whole channel that makes them a ton of money in order to hit back at the music industry's greed when most vendors would just bend over and take it.
    • by earlymon (1116185)

      Not really - TFA specifically said that they wouldn't absorb the cost because it would down iTMS. Otherwise, you're right on.

      • by Gewalt (1200451)

        They could also raise prices by 6 cents and continue on, business as usual. Otherwise, you're right on.

    • Re: (Score:3, Insightful)

      by MozeeToby (1163751)

      Now they're willing to drop a whole channel that makes them a ton of money in order to hit back at the music industry's greed when most vendors would just bend over and take it.

      Well, close. I think what you meant was that they are willing to say that they are willing to drop a whole channel. Now maybe they actually will if it comes down to it, but I doubt it. Would you throw away 8% of your revenues just to make a point?

  • Sweet! (Score:4, Funny)

    by Bryansix (761547) on Thursday October 02, 2008 @03:45PM (#25237403) Homepage

    Apple has intimated such a change might cause a complete shutdown of the iTunes Music Store.

    Finally! Then we can all go back to sharing music like we were intended to in the first place.

  • The labels get the majority of the 99c you pay for a song. This is Apple talking tough to get the labels to accept taking most of this increased royalty out of their 70c instead of Apple's 29c.

    • I'm pretty sure Apple could charge $1.06 if they wanted to, and it wouldn't make the slightest difference in terms of sales. Rather than one industry or the other being hit, wouldn't it make more sense to pass on the charge to the customers?

      Price increases happen in every industry. I don't see why music should permanently cost 99c.

      • by randyest (589159)

        I'm pretty sure Apple could charge $1.06 if they wanted to, and it wouldn't make the slightest difference in terms of sales.

        I'm pretty sure you're wrong, since I've read research to the contrary. Unfortunately, I'm too lazy to look for it, so I'll just leave this as-is -- it's as equally supported as your claim, so we cancel out until someone posts a link to the study.

      • Price increases in most industries are caused by costs of production, supply and demand, or other economic forces. This is a case of "because we can" which, though it could conceivably be caused a market force, is much harder to swallow from the consumer side.

        Also, given that music is by no means an essential consumer product and that there are plenty of people in fear for their financial future right now, raising the prices for no apparent reason probably won't be as harmless to the company as you seem to

      • Why shouldn't it cost 99c?
        The only reason this is occurring isn't because of some fundamental increase in the price of delivering good. It's happening because someone wants to line their pocket.

      • Wow, talk about the WRONG question to ask.

        In terms of economics, how much should an item cost if supplies are limited and demand is high? A lot.
        How much should an item cost if supplies are plentiful and demand is low? Not much.
        From a few datapoints, we can see there's an inverse relationship between supplies vs cost and a direct relationship between demand and cost.

        I wonder what happens around the area where supply = infinity ... Or better yet, what is the inverse of infinity? That's how much I'm willing to

  • by David Gerard (12369) <slashdot@NospAm.davidgerard.co.uk> on Thursday October 02, 2008 @03:48PM (#25237435) Homepage

    Apple is evil [today.com], but the music business is evil [rocknerd.co.uk] and stupid [rocknerd.co.uk]. If you were going to pick someone to make Apple look good, you couldn't pick better villains.

    Do the record companies realise they're competing with free? Apple realise this. Raising the prices will drive away customers who do have another option. No-one buys music because it's the only way to get it, anyone who buys music these days does so because they want to.

    BitTorrent: because fuck you, Hollywood!

    • Re: (Score:3, Insightful)

      by Arivia (783328)
      One of the articles linked to another article that hammered this point home for me: it is now a revolutionary, wonderful new feature that all your equipment and media will be compatible with each other. Think about it. DRM has fucked things up so much that the new carrot is "You can play this on your TV, and your computer, and your mp3 player." That's just fucked.
  • by snoig (535665) on Thursday October 02, 2008 @03:49PM (#25237455)
    Having users that have no desire to install iTunes and all the Apple related crap on their work computers would make my life so much easier.
  • by MikeRT (947531)

    Where is the recognition of the fact that they're not helping Apple absorb any of the costs of this program? Credit card processing fees aren't exactly cheap, for one thing. As long as we're having government decide how to make everyone play nice, let's make them go all the way.

  • 70 Cents? (Score:4, Insightful)

    by whisper_jeff (680366) on Thursday October 02, 2008 @03:53PM (#25237511)
    I think, at 70%, Apple more than pays for the right to sell the songs. Music companies don't want to pay that additional hike to copyright holders? Tough. They're making 70% off each sale - they make more than enough to pay the additional fee. Greedy pricks.
    • I have an idea! If you're a band, sell your songs yourself on iTunes! Collect the 70 cents/song yourself, and then arrange your own tours for the ticket sales.

      /rocket science, this is not

  • Right now, it's 9 cents a track which adds up, when you sell 2.4 billion tracks each year.
    .

    It is not as much the total yearly cost, but more the cost per song that Apple sells for $0.99 a pop. The additional royalty charge may just make a song cost more to Apple than Apple can recoup from selling it.

  • by mcsqueak (1043736) on Thursday October 02, 2008 @03:55PM (#25237551)

    And by "they" I mean both parties, Apple and the music industry.

    On one hand, I understand Apple's stance. The recording industry would be stupid if they made moves that could shut down what has so far been the most popular online music store to date. In my opinion, it is pretty F-ing stupid to try and pass a royalty hike at this point and time.

    My thinking is this: Apple is doing all the hard work of running the store, and the record industry is profiting off of this additional sales stream. If they pass the royalty hike, they might not get their increased royalty revenues - likely, they'll get NO MONEY AT ALL if Apple goes through with its bluff of shutting down iTunes. Which is better, earning several million dollars a year in revenues from iTunes, or none at all? Stop being so greedy already.

    On the other hand, how wise would it be for Apple to kill off part of what makes the iPod so popular? I'm a iPod owner who has never bought a track from iTunes, but obviously there are a LOT of people out there who use it. I don't think it would be so smart for Apple to shut such a service down... I wonder if their iPod sales would suffer as a result.

  • by rlp (11898) on Thursday October 02, 2008 @04:00PM (#25237625)

    Admittedly digital music is a luxury. But the economy is doing so well that people won't mind spending a little more on their music. Oh, wait ...

  • Let's look at what's been changing in the download industry that might justify the change.

    Is the cost per track for the end user going up: No, it's holding stable and in some situations going down.

    Is the distribution cost for the track going down: Track bit-rates have gone up, and the size of overall catalogue has gone up, so there is more to hold and distribute per track.

    Have the copyright holders done anything to enhance the value of their existing copyrights: No.

    The only remaining justification i
  • First .. Wal*Mart decides to shutdown it's DRM support system, so no more transferring music to another computer unless you quickly burn everything to CD.

    Now Apple threatening to shutdown it's music store, probably putting everyone in the same boat in a few years when they decide to not support servers that aren't generating revenue.

    I think my need for Apple products stays as 'no need' and my need to download music at 'slight need'.

    I try to buy only DRM free CDs and rip everything to disk. Or buy downloads

  • 15 cent royalties? The damn mp3s should only cost 15 cents a piece. You're getting 1/3 the quality of a lossless track at most. And you are paying the same or more than a physical cd would cost from a physical store with all the liners and art. You people are seriously getting ripped off. I really wish places like eMusic would start getting more artists, and more mainstream artists, and higher quality tracks. I just don't understand why no one seems to offer lossless tracks (for non-obscure non-live artist

    • Why not lossless? Because most people don't care that much?

      15 cents a song? I think you would take a BEATING on server costs, bandwidth costs, staff costs, and credit card processing costs. But hey, if you want start a service selling tracks for 15 cents, be my guest!

      For me (and I would guess a lot of people) itunes store works fine. I rarely if ever buy a whole CD, just single tracks--impulse buys. Don't really care too much if its lossless as most of the time the encoding sounds good enough for me on my e

      • Lots of people have already sold mp3s for less than 15 cents. Allofmp3.com sold tracks for a nickel a piece and made a profit. Hopefully someone eventually will realize that high volume, low prices and a reasonable profit is pretty good and legal cheap mp3s will exist.
        • Re: (Score:3, Insightful)

          by Moridineas (213502)

          Wow, you cite Allofmp3.com as an example? You do realize it's like...totally illegal, right? Sure it's cheap to sell something if you don't have to buy it in the first place? Speaking of which, I've got a great bridge you might be interested in...

          I don't understand the whining about a $1 mp3. I can understand complaining about lossless to a degree. I can understand complaining about DRM. But $1? That's less than a can of coke, a swig of beer, less than a big mac, etc etc.

          Then again it seems that most people

    • by Knara (9377)

      FWIW, you can buy 256kbps AAC non-DRM'd versions of just about everything on iTunes for a bit more.

      If you're really concerned about better quality music and artists, iTunes isn't the best place to discover them, but if they are indies and self-release their albums, the cut that the actual artist receives is HUGE for that $.99 sale ($.70 per download and more for the non-DRM version, "iTunes Plus" I think its called). iTunes isn't the problem here, since they're passing most of the sale onto the rights hol

  • Come on folks, you should realize that Apple would never shut iTunes store down. How would they then sell iPods?

    They are simply posturing for the day when Steve has to say "We've tried every alternative option but the Labels wouldn't let us. So, knowing how much you love music, and how much we at Apple love music, we decided to split the cost with you. From now on, songs will be $1.05 (or whatever), we'll pay for half the Labels' demands, and we think you'll love being able to use iTunes and enjoy your musi

  • Isn't Apple's agreement with the record labels? Surely the 9 cents comes out of the labels' share. That's what the cnn article implies. So instead of 29 cents going to Apple, 61 cents to the label and 9 cents to that guy who did nothing except all write and perform the song, it would be 29 cents to apple, 55 cents to the label and 15 cents to the worthless waste of space.
  • Why is it that the RIAA can pressure Apple with threats to make them use DRM, but not Amazon?

    Amazon is currently selling DRM free MP3s, heres' a sample page:

    Amazon MP3 Store [amazon.com]

    They'll work on whatever cheap crummy MP3 player (or high quality MP3 player, or iPod) you want to use. You can make as many copies as you want, record MP3 CDs, the works. Shouldn't the RIAA be crying bloody murder?

    Or is it just that the pressure from RIAA is just a pretext, and Apple doesn't want people to be able to easily us

  • Wait a second. Has the Copyright Royalties Board ruled yet? They're due to rule today, but the BBC article is from yesterday, and the CNN one from Tuesday. I see nothing on a ruling on google news. Anyone?

  • Apple Records Inc (Score:3, Insightful)

    by jayhawk88 (160512) <jayhawk88@gmail.com> on Thursday October 02, 2008 @04:37PM (#25238201)

    The fact that music labels don't (or perhaps don't want to) see what they might be doing by forcing Apples hand here is just amazing. What's to stop Apple from getting into the record label business to support iTunes? Like they couldn't sign a thousand acts tomorrow if they promised them prime promotion in the iTunes Music Store? They might not be able to get the big names right away, because of existing contracts or just general reluctance from artists, and they would certainly lose most if not all of their back-catalog, but Apple absolutely does have the kind of capital necessary to pull this off, and a huge built-in market that is essentially tied to their wildly popular distribution mechanism.

    Losing big name artists from major labels would certainly hurt iTunes sales, but again, Apple certainly has the kind of cash necessary to subsidize an iTunes record label until it found it's footing (and until major artists realized how much iTunes sales really meant to them in this day and age). 100 million iPods aren't just going to disappear overnight, people will still turn to iTunes for their music. So long as they could keep setting the trend with their iPod line, it's hard to believe that an iTunes label would not eventually start scoring major artists, or perhaps start creating their own major artists from little known artists/bands eager to sign with the iTunes label.

  • by gilgongo (57446) on Thursday October 02, 2008 @06:10PM (#25239443) Homepage Journal

    I think this is unlikely to happen, but if it does then the P2P networks will get rather more traffic, thereby providing even more proof that the publishing industry just doesn't understand what's happening. Every time they try to throw their weight around like this, it make them weaker and the darknet stronger.

    Be that as it may, there is an inaccuracy in the BBC's reporting on this. They say:

    "Apple pays an estimated 70% of digital music revenue to record companies which in turn pass on a percentage to artists [my emphasis]. It is that percentage that is expected to be changed on Thursday."

    Actually, I think the National Music Publishers' Association pays this percentage to songwriters and composers of works via the publishers that the NMPA represents. And (surprise!) the publishers cream off between 3 to 15%. In many cases the composers are not the same as the artists that perform the works, and many will in fact be dead (the money goes to their relatives, estates or licensees, or nowhere if these cannot be found).

    But who cares? The way the money works in music is - to say the least - opaque. With the exception of a tiny minority of super-stars like Cliff Richard and Simply Red, when you listen to your favourite band, you are listening to indentured servants. What will happen when we realise that the copyright system overall is completely iniquitous? In 1994 (MMC, 1996 [firstmonday.org]), 10 UK composers received more than £100,000 (from performing and mechanical royalties). How many people working in the UK music industry that year who were not composers earned more than £100,000?

    I'm betting that it was rather more than 10.

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