Apple Threatens to Close iTunes Store Over Royalties

Apple could shut down the iTunes Store, the world's biggest online music store, if a ruling expected Thursday forces the company to pay more to music makers for each downloaded track.

The Copyright Royalty Board (CRB) in Washington, D.C., will decide whether to grant the request of American music publishers to increase "mechanical" royalty rates on songs bought from online music stores such as iTunes.

The National Music Publishers' Association, which represents the interests of music makers and songwriters in the U.S., wants rates to be increased 9 cents to 15 cents, which represents a 66 percent rise.

Apple has vehemently opposed the move. In a statement to the ruling body in 2006, the company threatened to shut down iTunes rather than raise the price of songs in order to afford the higher royalty rates.

"If [iTunes] 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.

• Click here for the rest of the story at the Times of London.

• Click here for Cue's testimony to the CRB (pdf).

• Click here to visit's Personal Technology Center.