Rolling Stone has reported that the National Music Publishers’
Association (NMPA) is seeking a 66 percent increase on royalty rates
for digital music sales on iTunes.
The royalty rate increase would raise royalty’s from nine cents per track to 15 cents per track.
If NMPA‘s request is granted, iTunes would have no choice but to raise their 99 cents a song pricing.
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Instead of increasing pricing, iTunes has made threats to shutdown their services if NMPA‘s request is approved.
“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,” iTunes Vice President Eddy Cue said in a
statement. “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.“
Although a mass shutdown of iTunes seems quite unlikely, the
increase on royalty’s would mostly likely take a toll on product sales
for Apple products and sales on iTunes.
