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  #1  
Old 10-01-2008, 05:07 PM
Jason Dunn
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Default Apple Threatens iTunes Shutdown if Royalty Increase is Pushed Through

http://blog.wired.com/music/2008/10...days-copyr.html

"Apple has threatened to shut down the iTunes music store if an obscure three-person board appointed by the Librarian of Congress increase the royalties paid to publishers and songwriters by six cents per song. The Copyright Royalty Board is scheduled to hand down its decision on these rates Thursday. As part of their general muscle-flexing of late, music publishers asked the board to increase royalties paid to publishers and songwriters from 9 cents to 15 cents per track. Apple -- which has mightily resisted tampering in any way with its 99 cent price point for tracks -- said that if the rate hike goes through and the labels refuse to absorb the entire resulting increase, the iTunes music store will become unprofitable."

If you put music on your Windows Mobile phone, your MP3 player, or your Zune, and you ever purchase that music from iTunes, this is news you'll want to know about. I'm not personally a big fan of iTunes, but I certainly support their stance in resisting this move. They've sold several billion songs, largely because the 99 cent purchase price of an iTunes song is a reasonable alternative to piracy for most people. If you give people a chance to be honest, they will - iTunes proved that. According to this Wired article, Apple pays artists and labels 65 to 70 cents per song, 9 cents of which the artist or studio is paying to the publishers. It seems to me that if this law were to pass, the increased rates should come from the artist/label end - after all, without the songwriter that created the song in the first place, they'd have nothing in the first place.

It will be interesting to watch how this plays out - the music industry has been undermining Apple and iTunes lately, offering DRM-free MP3s to Amazon while denying them to Apple. Steve Jobs isn't known for compromising (what with that huge ego and all), so this will be interesting to watch. And if this law does pass, what will happen to Amazon's MP3 store? Or Rhapsody's MP3 store? Will we see $1.10 pricing there (you just know they'd round up), or will they too shut down? This could have some dire consequences for online music stores, who all operate at razor-thin profit margins as it is. Could this kill or cripple the entire industry? The music companies would prefer to have us all buying CDs anyway, right?

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  #2  
Old 10-01-2008, 05:32 PM
Ricardo Dawkins
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is this ZuneThoughts or iTunesThoughts ?
 
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  #3  
Old 10-01-2008, 06:44 PM
Jason Dunn
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Quote:
Originally Posted by Ricardo Dawkins View Post
is this ZuneThoughts or iTunesThoughts ?
First off, one iTunes post does not iTunesThoughts make.

Secondly, the Zune can play AAC files, so there are Zune users who purchase the DRM-free iTunes Plus songs for their Zune. And, regardless, it's relavent to the Zune world that Apple is threatening to shut down iTunes - they're the biggest online music store on the planet.
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Old 10-01-2008, 07:27 PM
Underwater Mike
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Well, as a recent convert from WM to iPhone, I wish Jason WOULD start an iPhoneThoughts site!

It's too bad that people won't boycott all music for a month or something to get the point across. It's not like you need new tunes to survive.
 
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  #5  
Old 10-01-2008, 07:30 PM
Dyvim
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Quote:
Originally Posted by Ricardo Dawkins View Post
is this ZuneThoughts or iTunesThoughts ?
Even if Jason were taking a pro-iTunes stance, which he isn't, what would you care? I see you over on the iLounge forums evangelizing for the Zune all the time.

No matter your personal feelings on iTunes\iPod, this article is relevant to those interested in digital downloads.
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  #6  
Old 10-01-2008, 08:27 PM
Stinger
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It sounds like an idle threat. Closing down iTunes would hurt Apple more than it would hurt the record industry. Amazon are the likely winner in all this.
 
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  #7  
Old 10-01-2008, 10:02 PM
Rocco Augusto
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Quote:
Originally Posted by Jason Dunn View Post
Could this kill or cripple the entire industry?
I think this is what the music industry wants. Right now Apple is on the top of the world where music is concerned, but it is amusing to see them pull the whole "I'm going to take my ball and go home!" stance just because they don't get their way.

Almost every other digital music downloading house is making the move to non-DRM MP3 music and you don't have to deal with the hassle of iTunes to purchase them. If iTunes shuts down it would only push more business to those other retailers while at the same time effectively killing the iPod. The iPod's success goes hand and hand with iTunes. No iTunes, no reason for people to continue buying iPods.

Trying to explain to the average consumer that you could use other applications to transfer music to the iPod is like trying to walk them through building a bomb. It is way to much hassle for most people. People would just move to a different device with a software that allows them to purchase music and upload it to their device.

Also can you imagine the backlash from individuals that wouldn't be allowed to access their music if Apple turns off their DRM servers and shut off iTunes. There could be riots in the streets!
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Last edited by Rocco Augusto; 10-01-2008 at 10:07 PM..
 
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  #8  
Old 10-01-2008, 10:09 PM
Felix Torres
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I favor the increase.
Especially as *streaming* rates are coming down.
Shifting a few cents from streaming to downloads will encourage internet radio and other streaming ventures without unduly punishing the creative types who've been generally shafted by Apple and the studios.
Besides, its about time *somebody* called Apple's bluff.
Shutting down iTunes?
Riiiighht!
That'll be a really cold day in...the amazon...
 
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  #9  
Old 10-01-2008, 10:24 PM
Fritzly
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The issue here is not Appl or Amazon or some other company, the point is that greedy music companies want to increase the prices of songs. It is interesting to see how many people are so Apple-fobic that act like that man who found the wife in bed with another man and cut his attributes as an act of revenge against her. Have fun when you will pay more for the music you download.
 
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  #10  
Old 10-01-2008, 10:36 PM
whydidnt
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Wow, I wish I could get raise for work I've completed previously. If I understand this right, the royalty board is recommending the rate increase on all tracks, regardless of when they were published. This makes no sense. The reason we have copyright is to encourage people to create new works. These song writers already created their work under incentive of the old plan. They are just getting a bonus for no reason whatsoever.

I hope Apple does tell them to stuff it and pulls all impacted songs from iTunes. The artists and record companies can then lose EVEN more business to piracy, since folks won't reasonably be able to procur music they want in the way they want.

What public good is the Royalty Board serving by raising these rates? Do we have a lack of song writers? So much so, that we have to increase what they are paid for their work? My thought is that we have PLENTY of choice in music under the previous rate, so there is no need to raise this rate, and our cost for music. It seems obvious this Royalty board is not acting in the public interest as they should, but rather in the interest of the music industry. The government should NOT be in a position of propping up any industry, at the public in generals expense. (and that includes "other bailouts" you might have heard of recently).
 
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