The Decision Is In: No Royalty Rate Increase

It was over before you could even tell your friends about it. Yesterday, Apple threatened to shut down iTunes in response to an upcoming decision that could raise prices for the songs that it sells. Today, the decision has been made: no changes in the royalty rate will be made.

The three-member board that sets statutory copyright licenses e-mailed the Digital Media Association (DiMA), the National Music Publishers’ Association, Apple, and other download stores with its decision to keep the royalty rate 9.1 cents. The board also set the same rate for CDs and mandated established a 24-cents rate for ringtones. The decision is the first time the Board has established mechanical royalty rates for digital downloads.

After I wrote the post yesterday, I read on later that Apple could be bluffing with the closure, a thought that occurred to me while I was writing the draft. After all, it can simply add the additional cost to the price and let the consumer cover it. Regardless of whether the threat was real or not, all things are fine in iTunes-land, so keep buying those songs.

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TAGS: Apple, Itunes, Royalties
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