Apple’s iTunes has narrowly avoided a prospective threat to a royalty fee increase, as the federal Copyright Royalty Board has voted to leave the current rate of 9.1 cents per song paid to music publishers for the next five years.
Music resellers and songwriters alike are expressing approval of the board’s decision to not raise the royalty fees that are paid to publishers. The current fee of 9.1 cents per song will remain for the next five years, as the board has turned down the decision to raise rates to 15 cents per song. Before today’s decision, Apple had threatened to shutter iTunes in favor of raising song prices or absorbing a rate increase.
“We’re pleased with the CRB’s decision to keep royalty rates stable,” Tom Neumayr, an Apple Inc. spokesman. The Recording Industry of America was also pleased with the decision to keep current rates as an increase would “make up a falling percentage of the companies’ costs.”
“This was the first time in nearly three decades that the recording industry couldn’t set a fee on its own for sales of recorded music. The last government hearing to set the so-called mechanical royalty rate was in 1980 and was triggered by a change in federal law.”
“The Digital Media Association, representing online music stores including Apple, Amazon.com and Best Buy, said the decision will “help digital services and retailers continue to innovate and grow for the next several years.”
“The National Music Publishers’ Association, which represented songwriters in the case, was happy the fees weren’t cut in a declining music market. It also preferred the per-song fee structure because the money its members are due won’t change if record companies slash song prices to promote products like live concerts, from which songwriters and their publishers do not collect royalties.”
[Yahoo]
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