Apple is set to close its iTunes store depending on a ruling by the Copyright Royalty Board (CRB) on royalty rates paid to music owners for digital downloads. The National Music Publishers Association (NMPA) has proposed an increase in royalty rates from USD0.09 to USD0.15 a track, which represents a 66% increase.
From Apple’s USD0.99-per-track fee, the firm pays an estimated USD0.70 per song to record companies. The record companies, in turn, pay USD0.09 to music publishers that own the copyrights of songs.
Apple is against the increase and has threatened to close down iTunes if the ruling goes in NMPA’s favour. The CRB’s decision is scheduled for Thursday. Phil Leigh, president of digital media analysis group Inside Digital Media, says there’s a 50-50 chance Apple will follow through on its threat. “I think Apple is serious about what they’re saying,” he told The Industry Standard. “They feel strongly that the price of USD1 a track is where things ought to be.”