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Media (Apple) Media Businesses Music The Almighty Buck Entertainment

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 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 eldavojohn (898314) * <eldavojohnNO@SPAMgmail.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 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.

  • by tholomyes (610627) on Thursday October 02, 2008 @04:36PM (#25238195) Homepage

    Way to put everything but the relevant bit in bold. The statement pertains specifically to services and products that "entail the ongoing involvement of Apple", which music does not.

  • by 2nd Post! (213333) <gundbear@@@pacbell...net> on Thursday October 02, 2008 @04:53PM (#25238435) Homepage

    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.

  • Citation Needed (Score:2, Informative)

    by Anonymous Coward on Thursday October 02, 2008 @04:55PM (#25238461)

    How about posting a copy of the agreement that says that? Or are you just pulling shit out of your ass when you make that claim? So far all I've seen indicates the opposite...

    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.

  • 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."

  • by petermgreen (876956) <plugwashNO@SPAMp10link.net> on Thursday October 02, 2008 @05:44PM (#25239149) Homepage

    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 there is a crack availible for the version of itunes you are running at that time) or letting your itunes purchased media die with the last machine authorised to play it.

  • by hobbit (5915) on Thursday October 02, 2008 @05:57PM (#25239275)

    Listening to purchased music requires an authorized player, and authorizing a player requires the iTS, so playing purchased music certainly entails the ongoing involvement of Apple if you don't want to use the same computer your whole life.

    FWIW I agree that Apple probably won't leave their customers high and dry in this. I was merely disagreeing with tholomyes's assertion that "music does not [entail the ongoing involvement of Apple]". Playing music on your already authorized machine does not. Playing music beyond the life of your current machine does.

  • by TheUser0x58 (733947) on Thursday October 02, 2008 @06:21PM (#25239569) Homepage

    9. iTMS content continues to play when one has no connection to the internet.

    Only if your computer has pre-authenticated with iTunes servers. If I buy a new computer and copy my iTMS content to it, it will not play on the new computer without first checking in with iTMS servers.

  • by klyphio (971676) on Thursday October 02, 2008 @08:01PM (#25240715)

    I'm not sure why this article refers to iTunes because iTunes doesn't pay mechanical royalties on sales - the person/entity who owns the sound recording copyright (presumably the label who released it originally) is responsible for paying the mechanical royalty on the sales that are reported by iTunes.

    iTunes pays the labels 0.70 per song and at that point it's the labels responsibility to pay the mechanical, which is 9.1 cents for a recording under 5 mins or 1.75 cents per minute, which ever is higher. Where this gets interesting is for the really long songs, I've seen mechanical rates over 0.30 per song, which is why you don't see long songs over 10 minutes on iTunes. The labels just don't want to deal with them unless they negotiate a lower rate.

    So beyond the fact that talking about Apple + iTunes gets people all hot and bothered, this has nothing to do with iTunes directly.

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