Apple Threatens to Close iTunes Store Over Possible Royalty Hikes

[iMacmatician]

9¢ to 15¢.....
Wow.... wish I could have a 63% raise this year also.

15c/9c = 1.67

And I know musicians are not known for their mathematical prowess, but let's look at the numbers involved in me not buying your song. What is your cut of $0? Let's see... 0 minus... carry the 0... yeah, that's right: $0.

You just made my day.

Also people that keep saying low quality.. 128 is fine and 320 is over kill...

I have no problem with 128 kbps, as far as I know. I can even go down to 96 kbps. The thing is, I'd like to do a serious test on sound quality and my perceived sound quality of songs.

Math skills gone wild?
from $.99 to $1.5(0), there is a 50% increase.

$1.50/$.99 = 1.52

 

[jbernie]

The thing with the iTMS is the cost per track, 99c, it plays into the whole marketing ay of life, 99c sounds much cheaper than a $1.01 or $1.05 even though it really is just a few cents. And even though the difference between 99c and $1 is all of one cent, it is still less than a dollar.

More than likely though you might see Apple transition over to a subscription model service before canning the service completely, which I would find unlikely.

 

[Plumbstone]

I still buy CDs when I find new releases I want on sale at Circuit City and BB, and then import them into iTunes. CDs have the best bit-rate possible and it is like I have a master copy ready made for me. So in that respect this doesn't matter a whole bunch to me.

Still...

Its an incredible act of greed by the record companies, who CONTINUE to try and find new ways to disenchant themselves with the public. I was PO'd enough at them first with DRM to begin with, then screwing people like Pandora, now this. They can go F themselves, I hope Apple does it if they are forced into this.

It's not the record companies, to quote the article....

"According to Fortune, the Copyright Royalty Board in Washington D.C. is expected to rule on Thursday about a request by the National Music Publishers' Association to increase royalty rates for downloads from online music stores such as iTunes. The request asks for an increase in rates from 9 cents to 15 cents a track. It should be noted that this group represents the copyright holders of songs and is distinct from the record companies themselves."

These people represent the songwriters who own the rights to the actual music, the record companies only own the rights to the master recordings, not the copyright on the music itself. Sure if you have a publishing deal a publisher may collect royalties on your behalf and keep them in order to pay themselves back for an advance they may have paid you but not in every case. Many writers are unpublished and collect directly from ASCAP/PRS etc.

As people have mentioned above, it doesn't take much work on Apple's part to run the ITMS, and yet they take 10/11 of the money. To be honest, I feel this small increase is way too low, we need to support musicians, make it 25% of the final price.

 

[Slim02]

Agreed, i think it would turn out to be a right mess....



I don't think it would be all music downloaded from the store, eg the iTunes plus format music.

The DRM protection music will as you cant really do anything else with it. Most of my music from there is that protected stuff.

Worrying

WRONG..

Burn your DRM music to a CD and the protected will be gone and no more DRM.. There is ways still around DRM protection music, but I guess no one know how to do it...

 

[happydude]

go apple, don't take no s*it from the music peoples. they won't turn down the number one music reseller.

 

[mlemonds]

how much were the itunes plus tracks when they first came out? $1.29?

how many people were upset over the extra $.30 and of those who were upset, who still paid for the higher quality?

i didn't much care for paying the extra cash, i mentally justified it for the higher quality.

 

[zombitronic]

If Apple could operate as a Record Label, maybe they could get some major artists on their side by still selling tracks for $0.99 and giving the artists a straight 70% cut, like the App Store.

 

[andiwm2003]

so why can't artist just publish their stuff on itunes without any label involved? are they so caught up in those contracts?

anyway, i think it is entirely possible that apple closes the itunes store and just offers tools to load stuff from amazon and walmart into itunes. and of course you can continue to load music from CD's and Russiabn websites into itunes. itunes sells music for 1 billion dollar or more a year now. so a small loss can easily amount to 100 million dollar and more here. apple can't take that risk. and still most music in itunes libraries come from other sources than itunes.

the movie, audiobook and app section would still be open.

 

[Quicksilver744]

First of all, I am not impressed with any of the user bashing going on. If I want to see a bunch of idiotic trolling I'll just go to YouTube, thanks. You know what they say about "arguing on the internet" ...

I personally have purchased music and movies off of the iTS. They play in iTunes on my Power Mac G4, my MacBook Pro and my iPod 5G just fine. I am a semipro musician (played French horn for nine years,) and have a better ear for intonation and small pitch issues than most, having played/mixed in an orchestra/studio setting for a long while. I can't for the life of me hear any difference between a 128kbps AAC or a 160kbps AAC encoded straight from Logic on a pair of studio phones. Nor do I really care about FairPlay. iTunes store music is inexpensive and it sounds fine to me. I listen to music because it is enjoyable, not because I want to point out all of the technical flaws in its encoding. If it needs to be distributed, burning it to a disc and ripping it back in works. Most people are like this. They don't care.

Now, to the topic:

If the store disappeared, and suddenly I found myself redirected to Amazon or something, I wouldn't mind. It would still play on my computers and iPod and it would still be inexpensive.

Apple would mainly only close the store to make a statement: "If you guys really want the price hike, well, we're not making much off of our store anyway. If we get rid of it, it's one less thing for us to maintain. So let's see if you can find another major store that will give you what you want." Alternatively I could see Apple possibly kicking a few artists off of the store until they wise up a bit, like what happened to NBC.

And I'd be interested to know if there was any major store that would accommodate them. If they did, those specific artists would probably notice that compared to everyone else, they'd not be making as much money. 'cause, you know, there are other stores out there that might be affected by this. (This is MacRumors after all so I understand the focus on Apple, but still.)

Now if you're a musician or songwriter and you are making any money at all off of your music, consider yourself lucky! I've not made a penny despite several attempts at putting my music "out there" on various places. It's a tough business, and you have to adapt to the changing circumstances just as if you were working in any other field. Demanding a ... what was it? 63% increase? ... in royalties is not adapting and rips off consumers (collectively) and distributors. If you are suddenly making less and can't live off of it (if you can, consider yourself really, really lucky,) find something else like a part-time job to supplement it. Life's not always fair. Deal with it. (Of course, none of these people are going to heed this advice, let alone probably even read this obscure, random person's rant on a forum dedicated to Apple rumors.)

If the price hike did actually come into effect, then ... oh well. I'd find wherever offers legal music the cheapest and get that. If Apple can't offer that, then they'll lose sales and likely close the store after a while anyway, so it doesn't matter.

I would guess the App Store would probably remain open if the iTS closed. No reason to close that as it has nothing to do with the price hike.

Oh, and, for the record, I live in Ohio, and I am not a hillbilly.

 

[nyamanku]

wow... You're, like, so cool.

Now that's not very nice. It's kind of mean, you know...

 

[nemaslov]

So raise the rate of songs to $1.05 or 1.10. I know that number is not sexy but this would finally be something great for the artist and writer. Well for the publishing company and hopefully the artists have a stake in it.

 

[rockosmodurnlif]

Thank you Apple. Get rid of all that music, then dump the videos and TV shows and so I can finally scroll through all of the tip calculators and flashlight apps in peace.

 

[nemaslov]

If Apple closed iTunes I'd like to see how many users would switch to Amazon for their music. And this wouldn't just impact Apple, but the other stores… curious to see how much it would affect their profits.

If this happened, Amazon would have to raise prices too. So what. The artist should get a bigger cut. Raise the price a bit.

 

[bigmc6000]

Everyone should... they are the ones who work hard on the music


It is not right that the greedy scamming fools called record labels, agents, managers and all the others get all the cash off the music.

Mat

I gotta come to his defense on this one. The majority of popular "artists" are nothing more than people who are 1) pretty (with rare exception) and 2) can (usually) sing. There are obvious exceptions to the people who write their own music and play their own instruments but the age of doctored music is so rampant right now that you could find some kid in a HS choir to sing just as well as anyone in the top 20 songs on iTunes. Those people just got lucky in being "found."

All that being said, I'm all for paying "artists" but most of what is out there today aren't what we should be considering "artists."

 

[Moriarty]

It's inflation, folks. It's happened to everything else, now it's happening to music. Live with it.

Boohoo. People who really love music buy CDs.

 

[Unspeaked]

The thing with the iTMS is the cost per track, 99c, it plays into the whole marketing ay of life, 99c sounds much cheaper than a $1.01 or $1.05 even though it really is just a few cents. And even though the difference between 99c and $1 is all of one cent, it is still less than a dollar.

More than likely though you might see Apple transition over to a subscription model service before canning the service completely, which I would find unlikely.

So if it's all about semantics, Apple can sell iTunes tracks at 9 for $9.99!

Look! You get nine songs!!! For less than $10 dollars!!!

And they'll even make 6 more cents a track than the $1.05 number that people are throwing around...

 

[JG271]

Bands are not employees. They are under contract to produce one or more albums for the label.
Some labels will try to retain ownership of anything produced, but they rarely succeed in getting it. Always helps to hire a good IP attorney when negotiating with a label. Some bands have had their material "stolen" by labels because the band failed to have the contract reviewed by a competent attorney.

The exclusive right to distribute and sell is not the right of ownership.

Most of the stuff I have done is licensed exclusively to a particular entity for a set amount of time. After that time period, I have the right to license or sell my material to anyone else.
But I always retain ownership of the copyright.

Royalty rates are typically set in the contract. This varies widely, so I cannot say for a fact how they are for everyone. They are used as negotiating points in many contracts.

Thanks for clearing that up for me. I guess it varies from country to country, record label to record label etc. It interested me as Radiohead signed a 6 album deal, but even after they'd completed that deal EMI made a box set without even consulting them, so presumably retained ownership.

A record deal for a young band/artist seems like such a good opportunity that they might often go for a restrictive deal, and regret it later maybe. I've heard about few bands that have an initial label that takes far too much control over their material.

 

[alphaod]

As long as they provide DRM removal software, I don't really care. I'll go use Amazon.

 

[wgilles]

If it closes I'll start stealing music again for 2 reasons

1) iTunes is the best place to get music
2) To spite the stupid a holes who made it close

 

[nyamanku]

So it's true that if you just download a bunch of songs and burn it to a CD, you're DRM-free? Then why the fuss over DRM?
I mean, not only are you backing up all your music, just in case, but you can do what you want with it, too.

 

[mainstreetmark]

So it's true that if you just download a bunch of songs and burn it to a CD, you're DRM-free? Then why the fuss over DRM?
I mean, not only are you backing up all your music, just in case, but you can do what you want with it, too.

Because you can't play it on a non-iPod. And, as we've already seen from Wal-mart, and to an extent, Plays-for-sure, when the DRM rules change, you've got a lump of unplayable bits on your harddrive(s).

 

[147798]

It's just corporate posturing. Frankly, the market could absorb a small bump in cost-per-song, especially if DRM were removed! At any rate, Apple needs iTunes as much as the music companies. They do come across sounding a little juvenile, but it'll all work out. Even the nastiest spat -- with NBC -- ended up with content available through ITM. I'm not worried at all.

 

[aleksandra.]

I think it's high time record labels finally paid artists for their job. The problem is, they evolved when they could easily make gigantic profits and they won't accept easily that the situation has changed. People used to copy cassettes from friends, then they copied CDs, then they shared files... And then the companies started investing in DRM. Lost money IMO. Point is, since it's increasingly easy to copy music/movies/software, the price you pay for it has to be lower. Right now they try to fight it by making it more difficult to copy. Not much success with that.

 

[Brian Green]

The iTunes store may have been created to push hardware sales but it only takes walking down any city street these days to see that the iPod is everywhere. The iTunes store could close it's music business and remain with TV shows, Movies, Games, and Apps for as long as it took to prove to the unenlightened that they are out of line here.

The problem I see with Apple caving (and they shouldn't) is that they are showing that any group can demand more money and they'll have no choice but to raise rates. How many more groups are out there all looking for some for themselves? Is $.99 enough? Is $1.05 enough? Is $1.30 enough? Is $1.55 enough? You know the TV stations and movie companies will be watching this closely as well to see if they can push rates up too. The point here is that it'll simply keep going up without any new benefits or features for the end user. At what threshold will most iPod users look to other sources for the same music they are currently purchasing legally? If it's cheaper to buy music from Amazon, what continues to make the iTunes store viable? Perhaps buying one or two songs a month won't change people's habits with a rate increase, but what about those people who purchase a lot of music monthly?

Face it, the economy isn't exactly thriving right now. People are cutting costs in little ways already. If iTunes raises their rates when other stores do not, people will find other sources. That said, if Apple threatens to remove the iTunes store, they'd better be willing to pull the trigger. Empty threats are worthless.

 

[Kwill]

Well I do not sit in front of a speaker listening to music from CDs or MP3 and AAC players... I play music in game in both MP3 and AAC on the PS3 and 360. It sound as good as the music that was on the game it's self ...

With such scientifically controlled acoustic computations, no one should doubt your audiological assessments of ambient sound quality.