Apple To Shut Down iTunes?

Apple could shut down its iTunes music store this week, if a verdict from the US Copyright Royalty Board forces the company to pay higher royalty rates.

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Apple could shut down its iTunes music store this week, if a verdict from the US Copyright Royalty Board forces the company to pay higher royalty rates.

A ruling is expected by the board today (October 2) on an application by the National Music Publishers' Association to raise the royalty fees paid to its members on songs purchased from online music stores including iTunes.

The association wants to increase rates by 66 per cent, from nine cents to 15 cents per track, whereas Apple wants a decrease to 4.8 cents per track, reports CNN.

In a statement submitted to the board last year, iTunes vice president Eddy Cue said that Apple would not stand for an increase:

"If the [iTunes store] 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," the statement read.

Cue added that Apple would have no qualms about shutting iTunes down if it was not making enough money.

"Apple has repeatedly made it clear that it is in this business to make money," he said, "and most likely would not continue to operate [the iTunes store] if it were no longer possible to do so profitably."

Research analysts Piper Jaffray predict that Apple will have an 85 per cent share of the digital music market this year.

Credits for the report to Nme.com.

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217 comments sorted by best / new / date

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    rich420
    Apple actually wanted to decrease the royalties?! They are now officially more greedy that Micro$oft. BOYCOTT APPLE!
    racman92
    I love iTunes, but come on! I buy cds if I'm getting the whole CD, but if I only like one song, I'm not going to waste my money on the whole cd, like i did with Hinder...
    zombiekangaroo
    haha, thats rich, lol, i hope apple store gets shut down and piracy goes up 10 fold, what im really hoping doesnt happen is everybody switches to microsoft's zune, the thing sucks compared to the ipod
    Tabassco
    I think ALL of you (didn't read every comment) are overlooking something very important. Apple does indeed get a big share of the money that is earned by selling songs, but they never get payed for music that ISN'T sold... Think about it. There are hundreds of bands that never even sold a song on iTunes, but for whom Apple still payed to have their song on iTunes.
    Mulldarran
    Who the hell needs Apple anyway? We've been buying CD's for twenty years, lets keep it that way.
    Lemoninfluence
    lachlandavis wrote: I do not understand how they could POSSIBLY operarate at a LOSS when they are giving 9CENTS to artists whilst charging over a dollar a track!! What are they spending the money on?
    advertising, servers, people to run those servers, the programmers who continually work to update itunes, lawyers, accountants, shareholder dividends etc. regardless of anything else. apple is a business. they're not going to operate at a loss and they're not going to want to give away more money than necessary. That's capitalism. don't like it? tough, it's pretty well embedded in the modern world. checked.
    Aerotides
    bucketned wrote: sooooo ill just keep buying Cds like i have since i was nine... problems? yay, nay? alright then settled purchasing downloads blowz
    Actually it's really convenient from Amazon. The download manager is great. i use the amazon store for when I'm just too impatient to wait for a CD to be shipped to me, seeing as how there are no good record stores around here.
    r0ckz0mb13
    JahCohBee wrote: Nick1814 wrote: Where the **** did this news come from? Itunes isn't going anywhere. Now delete this shit. chrisdazzo wrote: It won't happen. People would flip the f**k out. True story.. I wish you people would realize that ITUNES IS TOO BIG TO FAIL!!! Haha.. ok sorry, bad reference... But seriously, come on.. they're the #1 seller of music today... I highly doubt they're gonna just shut down like that... Steve Jobs is just gonna throw a hissy fit and whine but other than that it'll be ok!
    but its true...apple wont go anywhere...same reason thy dont make smoking illeagal.....too many people do it for them to stop all at once.
    guitarfreak222
    KtuluCalls wrote: JRowe3388 wrote: Why do people assume an iPod can only play music bought on iTunes? well people are stupid. I mean all you need is windows media and a sync cable and your good. at least thats what I do with my phone.
    yeah thats your phone! I pods need music from the itunes library, it doesnt necessarily mean that the music has to be bought of the store. you can just put music from your cd onto the itunes library, and sync it onto yur ipod! see? easy.
    Biohazard
    Scorge wrote: arrayofemotions wrote: I'm not certain of this, but i think 15% royalties is a lot more than the royalties artists get from regular CD sales. 4.8% does sound more likely. the article was talking an increase of cents, not PERcent.
    15 cents is 15% of a dollar.....
    Hungry_Hameds
    meh who cares, i still by cds im so primitive, there's something about having the album and playing it on a stereo and personal cd player that i enjoy more than just downloading or whatever. If people are real music fans they'll still get their music, if piracy was such a massive problem the consequences would be big enough to actually put people off doing it...
    BassFishin
    i love the cd resale place thats about 2 miles from my house. i go there and spend tons of money of perfectly good cd's that no one wants anymore. that's how i do it. now, maybe the artists aren't getting money from it, but it's much more morally sound than limewire. itunes on the other hand i could give a crap about. whats the fun in owning a cd when you dont physically OWN the cd itself?
    gibson-sg-rocks
    i tunes rob record companies who rob the artists. i dont care about shiit pop sellout radio craap, but rock and roll will save us. so sccrew iTunes, they can burn in hell for all i care.
    pinkfloydfish
    Um... yeah, that's crap. If they're gonna shut down just because they have to give the people who MADE the music more of their share, then they deserve to be gone.
    str84ever
    JS5150 wrote: Pay the musicians, without them, no one would need iTunes, or an iPod for that matter
    as weird as it sounds. I NEED ITUNES. Theres music i listen to which i can't just go down to the local music shop and buy either cause its out of print or too obscure. Itunes is the only place that stocks it and although i would prefer physical copies I am not up for paying 50 for an album when i can get it for 8 off itunes.
    hendrix n page
    So many comments... and please don't kill iTunes though I do wish they had AC/DC but that's unrelated
    Spay
    Yes, yes, and yes. I'll stop 'stealing' if they give the money to the people who deserve it and not the people who are on 'the top of the foodchain'
    archangelseren
    not make enough money.... 85% share? what the hell those apple people been smoken... anyway itunes is pretty crap anyway with its protection it just gets in the way so if it ends it ends
    jshwak
    yea.. how dare musicians want compensation for their work ?? that's just crazy !! and the upper-crust wonder why piracy is so rampant..
    vabrownsfan89
    That is absolutely rediculous. I personally dont use itunes, but i know a butt load of people that do, and to just stop operating it because they would have to pay 15 CENTS a song to the people that made it is shit. If the government thinks that internet piracy is bad now, wait until the only big site that charges for songs and actually works shuts down.
    goon316
    Thats why I rarely buy any cd's from the artists I enjoy but go to every one of their concerts. They make a little off the cd's but make most of their money off of tours and merch.
    thrashster
    apple doesnyt deserve shit, there lucky to be making money off of other peoples art, 15 cents is still ripping off these artists.
    arrayofemotions
    I'm not certain of this, but i think 15% royalties is a lot more than the royalties artists get from regular CD sales. 4.8% does sound more likely.
    YetAnotherMuso
    jetfuel495 wrote: archangelseren wrote: not make enough money.... 85% share? what the hell those apple people been smoken... kurt cobains ashes?
    dammit, and here I was thinking I was original for my joke...kudos to you my man
    Andy2k64
    Wow i think Apple are going a bit power crazy! I think Steve Jobs just wants a new ferarri or some sh*t!
    madman885
    So would this **** over the iPod as well? I'd like to see the Zune get popular.
    Gmurcielago14
    Tedward wrote: SlashYourFug wrote: Jesus, bands only get 15 cents per song?! And we're the pirates? no kidding. They sell those songs for like a 1.50 each. the people that dont even make the music get all the money. i ****ing hate apple and everything they stand for
    Hate apple, but I love their products...
    shadow__666
    I'm an Apple devotee, but this is just retarded. Does Steve Jobs really need more money? Oh well...I buy CDs anyway.
    tona_107
    Why does apple need 91% of the profits? What is the running cost of the itunes store honestly? How could only running 85% of all revenues somehow mean a deficit?
    smackjack29
    I HAVE AN IDEA! how about instead of incresing royalties like the artists want or deacreasing royalties like apple wants why dont they keep it the ****ing SAME!
    VertigodowN
    mr.happyman wrote: This didn't pass just so you guys know. saw it on cbc.
    ya and they also said we were in no danger of a crash at all last week, go figure
    Sic59
    JRowe3388 wrote: Why do people assume an iPod can only play music bought on iTunes?
    cuz their ignorant
    Metall_pingwin
    tamargoguitar wrote: 5 cents per song?? i thought itunes was much more expensive, like 99 cents per song or something
    -_- 5cent royalties. People pay 99 cents, Apple keeps 94, the label\artist makes 5. They want to make it so that you pay 99 cents, apple keeps 85 cents and the artist\label makes 15.
    davlop91
    Well, i know you can download music form other sites. So its just gonna be iTunes (like the library and shit) without iTunes store?
    -xCaMRocKx- wrote: davlop91 wrote: So if I have an iPod, where am I going to get my music from? You're not serious? This been said so many times, you DON'T need itunes store to put music in itunes! You can get your music from ANYWHERE and put it on itunes.
    bucketned
    sooooo ill just keep buying Cds like i have since i was nine... problems? yay, nay? alright then settled purchasing downloads blowz
    draceul
    It's not like their ripping off the artists. The artists get a certain percentage on the sales. It's not like itunes is buying the CD for 15 bucks and then selling the music... and people buy music off of itunes because it's easier, faster, and cheaper, so the artists probably make more money off of itunes than the CD's.
    AndrewMuller
    This should encourage something new. Perhaps a program or site were the Artists THEMSELVES sell the music. And they take an actualy fair share of the cut. As in like, 90%. As in, leave the record companies right out of it. Sadly impossible because it seems that the record companies own the music....wishful thinking I guess.
    Phoenix_24Leas
    davlop91 wrote: Well, i know you can download music form other sites. So its just gonna be iTunes (like the library and shit) without iTunes store? -xCaMRocKx- wrote: davlop91 wrote: So if I have an iPod, where am I going to get my music from? You're not serious? This been said so many times, you DON'T need itunes store to put music in itunes! You can get your music from ANYWHERE and put it on itunes.
    yes
    pyritmann
    people call us pirate for downloading music, these people are the criminals for stealing all this money from people who think they are paying the artist, while fat comupter nerds get 85 percent, its a total shame that these greedy chumps rule the world.
    IbanezBassman
    goon316 wrote: Thats why I rarely buy any cd's from the artists I enjoy but go to every one of their concerts. They make a little off the cd's but make most of their money off of tours and merch.
    Much the same. I goto the concerts. I illegally download music and I buy some at the record stores. I don't use iTunes I don't like it. Shit range. Too expensive. CD stores are cheaper for albums
    IbanezBassman
    By the way Robert Smith (Cure) really hates iTunes too. He's gone off at them a bit lately. Hope it stays so CD's are cheap
    rhcpfan118
    this is bullshit. a. they're not shutting down iTunes, they're shutting down the iTunes Music Store... which still sucks, b. 10 cents may not seem like a big deal, but multiply that by millions of songs and it adds up, now multiply those millions of songs time the hundreds of times they're bought and it is absurd. i'd rather have iTunes than CDs, at least that way i can buy the songs i want and not have to buy a lot of shitty songs to go along with the ones i like. (not that that's always the case) this will just make piracy go up 10 fold.