Itunes shutdown? - Chicagoland Sportbikes
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post #1 of 10 (permalink) Old 09-30-2008, 05:31 PM Thread Starter
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Itunes shutdown? Update

http://money.cnn.com/2008/09/30/tech...ion=2008093014

Apple's digital music showdown
A ruling this week could force online music sellers to pay publishers more money - as an Apple threat to close iTunes looms.
By Devin Leonard, senior writer
Last Updated: September 30, 2008: 3:21 PM ET

NEW YORK (Fortune) -- For five years, Apple's iTunes Music Store has been the Internet's most successful music store. But as music publishers have sought a higher share of its proceeds, Apple has threatened to shutter iTunes.

The Copyright Royalty Board in Washington, D.C. is expected to rule Thursday on a request by the National Music Publishers' Association to increase royalty rates paid to its members on songs purchased from online music stores like iTunes. The publishers association wants rates raised from 9 cents to 15 cents a track - a 66% hike.

Apple (AAPL, Fortune 500) declined to discuss the board's pending decision or its previous threat to shut down iTunes. But it adamantly opposes the publishers' request. In a statement submitted to the board last year, iTunes vice president Eddy Cue said Apple might close its download store rather than raise its 99 cents a song price or absorb the higher royalty costs.

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

The Copyright Royalty Board is a three-judge panel that oversees statutory licenses granted under federal copyright law. That includes setting royalty rates for music sales. The current proceeding followed the expiration last year of a 1997 decision that had governed sales of so-called physical music products like CDs for a decade. The board's forthcoming decision, its first affecting digital sales, will set royalty rates for the next five years.

It's hard to believe that Apple will actually shut down iTunes if it doesn't get its way. Apple has shrewdly used the store to help sell iPods, its most popular product. Before the computer manufacturer opened the store in 2003, there was virtually no place for iPod owners to purchase digital music on the Internet. So iTunes helped grow the market for the device by appealing to people who didn't want to patronize illegal file-sharing services and risk a music industry lawsuit.
A fee hike nobody wants to pay

Piper Jaffray estimates that Apple will sell 2.4 billion songs this year, giving it an 85% share of the digital music market. But Apple's rhetoric illustrates the challenges that the nascent digital music industry faces.

The Recording Industry Association of America says sales of digital songs and albums rose 46% last year, to $1.2 billion. But as Cue notes in his statement, Apple's profits from iTunes remain slim. This is because Apple doesn't think the market is strong enough for it to raise its 99-cents-a-song price.

"I have no doubt that an increase in the per track price would lower total music purchases at the store," the Apple executive said in his statement.

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.

The record companies are in no mood to pay the proposed royalty increase out of their pockets. Not when CD sales, their one-time cash cow, fell last year by 20%, to $7.4 billion. They are asking the Copyright Royalty Board to abandon the fixed per-song payment in favor of 8% of wholesales revenues.

The Digital Media Association, which represents Apple and other online music services, is seeking an even lower rate of 4.8 cents a track, or 6% of "applicable revenues."

"No one disputes the impact of rampant Internet-based piracy in the marketplace," the association's lawyers said in July 2 filing. "The result is drastic reduction in the sales of recorded music in all formats and intense downward pressure on retail prices - along with a brutally difficult competitive environment."

The music publishers are unmoved. They argue that the digital music market is growing and that they should get a higher rate because all parties in this squabble will ultimately prosper. "I think we established a case for an increase in the royalties," said David Israelite, president of the National Music Publishers Association. "More importantly, we were able to beat back the proposal that could be a [royalty] cut."

Israelite said he opposed any attempt by companies like Apple and its record label allies to do away with the fixed royalty rate. "Apple may want to sell songs cheaply to sell iPods," he said. "We don't make a penny on the sale of an iPod." To top of page

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post #2 of 10 (permalink) Old 09-30-2008, 05:48 PM
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post #3 of 10 (permalink) Old 09-30-2008, 05:50 PM
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yeah cause i'm sure apple is barely making enough money to keep iTunes going

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post #4 of 10 (permalink) Old 09-30-2008, 05:54 PM
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LMFAO times are ruff even for the millionaires

Ill continue with getting the same quality song off myspace with the wonder net gadgets out there

go time traveler style and go back in time, fuck his grandma, then shoot forward in time and then fuck his mom. Then return back to present state and call him a the product of two incest whores and hes your son and show video of you plowing the both members of his family. .
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post #5 of 10 (permalink) Old 09-30-2008, 05:58 PM
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Ok, so I'm not the smartest person on her, but how much money does it take to run a site where your customers download a song? Doesn't sound like too much overhead here.
Now I know they have to pay ppl to keep servers running, and stop hackers, and rent the servers, and etc, etc,
But really, are they hurting that much that 6c a song is going to kill them?

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post #6 of 10 (permalink) Old 09-30-2008, 06:00 PM
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They argue that the digital music market is growing and that they should get a higher rate
so if the market is growing, aren't you selling more music, thus getting more of an income? so why are you entitled to a larger percentage of the profits?

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post #7 of 10 (permalink) Old 09-30-2008, 06:06 PM
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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.

now thats alot of cash for record companies to be getting...so out of each buck the total price apple gets is only 29 cents and to use that for supplying the site, using their software for the largest portable music player in the worldad opening the eyes and world to the new capabilities of todays technology...and the otherfuckers still want more money...sorry, but i agree with apple...if they shut down the store, thats fine by me...and i will go about getting my music however i want...

...plus my gf was with me saying "omg slow down, slow down" and I was thinking "Lose annoying squalk box in passenger seat, afford more mods and have less weight in the car and on the back of the bike"...so i dumped her and I'm single again as usual...HERE KITTY KITTY!!!
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post #8 of 10 (permalink) Old 10-02-2008, 05:09 PM Thread Starter
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http://www.appleinsider.com/articles...unchanged.html

Copyright board leaves music royalty payments unchanged

By Aidan Malley
Published: 05:25 PM EST

Averting a potentially drawn out conflict over music royalties at iTunes and other online stores, the Copyright Royalty Board on Thursday said it would preserve the same royalty rate as today for CDs and downloadable songs.

A three-person panel of judges determining the changes for the Board said labels would still have to pay the same 9.1 cents per song as they do today, rejecting calls by the National Music Publishers Association and connected artists to pay as much as 15 cents per song.

The decision brings a quick end to an argument between store operators and musicians where both camps had said their opponent's requests would be unsustainable. While artists have long called for better income for content sold, Apple in a statement warned it might need to close iTunes if the royalty increase took effect and labels were unwilling to soak up some of the costs.

Apple currently operates iTunes on minimal profit and claims it would take losses on each sale if it didn't raise prices, a move which it also believes would be untenable in the current market.

In a surprise move, however, the Copyright Royalty Board has also set a royalty rate per ringtone of 24 cents, effectively setting a government-determined rate for the first time. Ringtone fees in the US have until now been set through individual negotiations, which often leads to significantly varying prices and a limited selection as certain artists or labels may refuse ringtones due to fundamental disagreements over prices.

None of the involved parties have commented on the ruling as of press time.

"Beer is proof that God loves us and wants us to be happy"- Benjamin Franklin

SUPPORT OUR TROOPS!!

Quote:
Originally Posted by Vcook View Post
hahahaha, nice try. Everyone knows men age like wine and women age like milk. It's a scientific fact!!
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post #9 of 10 (permalink) Old 10-02-2008, 05:11 PM
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Shit - Some of these bands should be happy to have a disty channel as strong as Itunes is - if they feel they can do better elsewhere, I say C-YAAA!

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post #10 of 10 (permalink) Old 10-02-2008, 05:13 PM
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I was listening to Q101 on the way home today and heard that some band's recording ppl want more money from sale of the video game Guitar Hero cause they claim that ppl are buying the game because of the songs. Who ever makes Guitar Hero is saying that ppl are buying the game cause it's fun, and that the sales of albums of older bands are up cause of them.
Seems like it's not about the music but about the bottom line.

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