Apple royalty skirmish ends in stalemate

iTunes shutdown threats no more

By Austin Modine • Get more from this author

Posted in Music and Media, 3rd October 2008 00:11 GMT

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Apple's fight against paying songwriters has ended in a stalemate today.

The US Copyright Royalty Board rejected raising online royalty rates for song publishers — effectively ending Apple's threats that it would shut down iTunes if the song composer share was increased from 9 cents per song to 15 cents.

The rate has now been frozen at 9.1 cents per download for the next five years. CRB also established for the fist time a royalty rate for ringtone purchases at 24 cents per purchase.

Apple, along with the Digital Media Association (DiMA) and Recording Industry Ass. of America (RIAA) had been pushing for a reduction to only 4.8 cents a track, or 6 per cent of "applicable revenues."

Apple pays about 70 cents on the dollar to record labels, which in turn pays 9 cents to music publishers who hold the copyright for the music.

Although Apple has overtaken Wal-Mart as the top US music retailer this year, the company claims profits from music downloads are slim.

Happy not have lost their shirts to a pro-Apple decision, the National Music Publishers Association said the ruling was a positive for songwriters and music publishers.

These events will bring clarity and order to an environment that for the past decade has been hampered by litigation and uncertainty on all sides," said NMPA chief, David Israelite in a statement.

The sentiment seems to be consistent across the table.

"We're pleased with with CRB's decision to keep royalty rates stable," Apple wrote in a statement. ®

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