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Looming Royalty Decision Threatens iTunes Store, Apple Hints

timothy posted more than 5 years ago | from the but-each-penny-is-only-wafer-thin dept.

Media (Apple) 279

eldavojohn writes "You may recall us discussing some legislation about online music. More decisions are being made that may affect how much money Apple must impart to labels and musicians. Right now, it's 9 cents a track — which adds up, when you sell 2.4 billion tracks each year. The Copyright Royalty Board is asking for 15 cents a track (66% increase) and Apple isn't going to agree." Reader scorp1us points out a similar article at CNN; both stories mention that Apple has intimated such a change might cause a complete shutdown of the iTunes Music Store. Update: 10/02 21:03 GMT by T : According to CNet, the rate has been officially frozen at 9.1 cents per track.

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I Wanted More Anti-DRM Spin on This (5, Interesting)

eldavojohn (898314) | more than 5 years ago | (#25237209)

Apple has intimated such a change might cause a complete shutdown of the iTunes Music Store.

More importantly, what of the client software that interacts with the store? You know, the program that allows you to burn/listen/store "your" music?

As the user who submitted this article, I would like to point out that they removed my DRM fear mongering from my original submission. As a geek it's my duty to squeal like a stuck pig when troubles a brewin' and I think there's a rude awakening looming for a whole ton of iTunes users.

Essentially, I'm guessing the RIAA will pressure Apple into releasing or updating their client software to not decrypt the DRM'd songs (non iTunes Plus tracks) until the user coughs up the additional six cents. Hell, I have no way of knowing that this isn't already implemented in iTunes and Apple need only stop delivering the other half of keys to the clients to decrypt a user's data.

And that's why DRM has failed, continues to fail and will always fail. Nobody read the EULA/TOS of iTunes and nobody understands that when you're "buying" the song for a dollar, you're not buying anything but the right to listen to that song for some undetermined amount of time. Here's a simple case: What happens to "your songs" when you die?

Burn them to discs or convert them to an open format anyway you know possible, folks. That's the only advice I have--especially with this on the horizon. Buy Apple players, Amazon MP3s and look no further than the GPL for your software.

Re:I Wanted More Anti-DRM Spin on This (4, Insightful)

Reivec (607341) | more than 5 years ago | (#25237307)

Anyone that buys DRM music deserves the backlash. I am one of those annoying guys that told everyone he knew to not use the legal music stores, not because I like to steal, but because they would surely find themselves unable to listen to the music they purchased. This has already happened to my cousin to bought through the walmart service, then had to reinstall her computer, then replaced her computer, and had all sorts of issues getting the rights to play her music again. I think she got that resolved, but you shouldn't even have to go through all that.

I only listen to music not related to the RIAA and have done so for many years now. I find that I still find many songs I think are great and love to listen to, and never have to worry about being screwed over. And yes, I do buy CDs and songs, fairly often even.

What, even eMusic? (4, Insightful)

argent (18001) | more than 5 years ago | (#25237465)

I am one of those annoying guys that told everyone he knew to not use the legal music stores

What, even ones like eMusic that don't ship DRMed music and never shipped DRMed music?

That's not just annoying, that's irresponsible.

Re:What, even eMusic? (3, Insightful)

Smeagel (682550) | more than 5 years ago | (#25238145)

Aside from emusic which rules for indie picks - with amazonmp3 out there, I can't understand why anyone would buy any drm music period any more.

Re:I Wanted More Anti-DRM Spin on This (2, Insightful)

Duradin (1261418) | more than 5 years ago | (#25238255)

Too bad the Apple has hardwired its authentication system to its ability to sell music...

It's not like they could just stop selling music while keeping the authentication running. That'd be silly. That'd only happen if they sold other things than just music. Like applications or movies.

Why would this apply to already purchased music? (5, Insightful)

argent (18001) | more than 5 years ago | (#25237373)

Essentially, I'm guessing the RIAA will pressure Apple into releasing or updating their client software to not decrypt the DRM'd songs (non iTunes Plus tracks) until the user coughs up the additional six cents.

Why on earth would this apply to songs you've already bought? This is an additional royalty for new songs, making them cost 1.05 or making Apple push back on the labels to take the extra royalty out of their share...

Yes, you definitely need to turn "Rip Mix Burn" around to "Mix Burn Rip" and get CDR backups of all your iTunes music ANYWAY.

But at least iTunes DRM is "honor system" level... I mean, really, it gets downloaded unencrypted and the DRM is applied by the local client. And they haven't made any attempt to close the digital hole. Imagine how much it would suck if the labels had gotten everything they wanted from Apple like they have from Microsoft?

Re:Why would this apply to already purchased music (3, Interesting)

b96miata (620163) | more than 5 years ago | (#25237617)

I'm honestly a bit confused by all this - Record companies seem to have no problem paying artists less than the statutory royalties via one-sided contracts. Apple has contracts with the record companies saying they get x per track/album sold.

Near as I can tell, this bill will just change the "default" royalties.

A direct contract with the copyright holder (nearly always the record company) tends to bypass this sort of thing.

Re:Why would this apply to already purchased music (1)

ArtemaOne (1300025) | more than 5 years ago | (#25237789)

You ask how it can have an affect on the past? Their previous rulings (mainly affecting web radio) were retroactive for the past year and a half before that time, or something along those lines. They can bill you for stuff that's already happened no problem.

Re:Why would this apply to already purchased music (0)

Anonymous Coward | more than 5 years ago | (#25238161)

You actually believe that iTunes downloads unencrypted music when you buy it, then it encrypts it at the client-side? Are you seriously making that claim?

Re:I Wanted More Anti-DRM Spin on This (1)

collinstocks (1295204) | more than 5 years ago | (#25237405)

Although I doubt that they will, I hope that they close the iTunes store and cause everybody who bought songs on it grief. It is nothing against them, but it would be a rude awakening to those who think nothing of DRM. In the long run, it would (hopefully) lead to its death, eventually.

Re:I Wanted More Anti-DRM Spin on This (4, Interesting)

falcon5768 (629591) | more than 5 years ago | (#25237707)

except Apple has very clearly put clauses in their agreement with iTunes music buyers that if the store where to close they will bomb the DRM thus freeing your music completely.

I am sure the labels realize this and are fearful Apple might actually pull it off.

Re:I Wanted More Anti-DRM Spin on This (1)

collinstocks (1295204) | more than 5 years ago | (#25237865)

Either way, anti-DRM wins!

Re:I Wanted More Anti-DRM Spin on This (3, Interesting)

qoncept (599709) | more than 5 years ago | (#25237407)

"they removed my DRM fear mongering from my original submission."
"Essentially, I'm guessing the RIAA will pressure Apple into releasing or updating their client software to not decrypt the DRM'd songs (non iTunes Plus tracks) until the user coughs up the additional six cents."

I'm assuming that's because what you said was unfounded, but more importantly completely ridiculous. You can't retroactively revoke access to something that was already sold when using the product doesn't rely on your services. And stretch all you want, you aren't going to find a real life example of where it has happened. It will be shot down.

Re:I Wanted More Anti-DRM Spin on This (4, Informative)

eldavojohn (898314) | more than 5 years ago | (#25237535)

I'm assuming that's because what you said was unfounded, but more importantly completely ridiculous.

Yeah, completely ridiculous. Alright, here's the TOS [apple.com] :

d. You acknowledge that some aspects of the Service, Products, and administering of the Usage Rules entails the ongoing involvement of Apple. Accordingly, in the event that Apple changes any part of the Service or discontinues the Service, which Apple may do at its election, you acknowledge that you may no longer be able to use Products to the same extent as prior to such change or discontinuation, and that Apple shall have no liability to you in such case.

But it's completely ridiculous that I start to talk about them electing to discontinue your right to use the product. Completely.

Couple that with the fact that Apple pulled the $1 pricing scheme out of it's ass as well as the RIAA being a legion of lawyers and I think we've got ourselves the perfect storm. Of course, that's just completely ridiculous.

You can't retroactively revoke access to something that was already sold ...

Nothing was sold. Something was "licensed" temporarily to you in the very loosest sense of the word. By saying "sold" are you saying I now own the rights to the music I buy on iTunes? No, it follows the TOS which I pointed out is full of red alarms.

Re:I Wanted More Anti-DRM Spin on This (4, Insightful)

Creepy Crawler (680178) | more than 5 years ago | (#25237659)

That's why I pirate.

Services that sell physical media have quantities of bad-ware and other anti-user software.
Services that sell online media promise nothing, including playing tomorrow.

Piraters guarantee good quality product that will 10 years from now. They also happen to be free.

Media corps, give me a good reason why I should put MY money through a shredder and buy locked down, limited term, no liability media. If not, fuck off torrents, IRC, and sneakernet work great for me.

Re:I Wanted More Anti-DRM Spin on This (1)

qoncept (599709) | more than 5 years ago | (#25238157)

"Nothing was sold. Something was "licensed" temporarily to you in the very loosest sense of the word. By saying "sold" are you saying I now own the rights to the music I buy on iTunes? No, it follows the TOS which I pointed out is full of red alarms."

A license was sold. No restrictions based on time or due to future mishaps of the selling company are listed in that TOS. I'll bet you all of the money FEMA gave me you'll be able to listen to all of the songs you bought on iTunes for as long as you choose to.

Re:I Wanted More Anti-DRM Spin on This (5, Informative)

Ironsides (739422) | more than 5 years ago | (#25237419)

Essentially, I'm guessing the RIAA will pressure Apple into releasing or updating their client software to not decrypt the DRM'd songs (non iTunes Plus tracks) until the user coughs up the additional six cents.

Um, what? Are you trying to spin it such that people who bought the songs at 0.99 would have to pay another 0.06 in order to continue playing songs that they already licensed? That's not going to happen. Aside from violating the existing license, it would trigger a massive lawsuit against apple. The license for the existing songs has been paid, the terms can't be changed.

Re:I Wanted More Anti-DRM Spin on This (1)

earlymon (1116185) | more than 5 years ago | (#25237461)

Apple has intimated such a change might cause a complete shutdown of the iTunes Music Store.

More importantly, what of the client software that interacts with the store? You know, the program that allows you to burn/listen/store "your" music?

Re:I Wanted More Anti-DRM Spin on This (0)

Anonymous Coward | more than 5 years ago | (#25237517)

Kaudiocreator and libflac don't put DRM on my music. How can I experience these problems you are describing, without having to pay for it? They say open source software can provide all the benefits of closed source software, but so far I haven't experienced that one!

Thanks!

Re:I Wanted More Anti-DRM Spin on This (0)

Anonymous Coward | more than 5 years ago | (#25237637)

...they removed my DRM fear mongering...I'm guessing...I have no way of knowing...

What a load of total bullshit. You are a troll, setting up straw-man arguments based on pure conjecture to "support" your a viewpoint you had already made your mind up about. To give you credit, you're at least honest enough to state that your premises are conjecture, but guess what - your conclusions are only as good as your premises.

Re:I Wanted More Anti-DRM Spin on This (1)

Angostura (703910) | more than 5 years ago | (#25237763)

OK, I'll bite

Nobody read the EULA/TOS of iTunes and nobody understands that when you're "buying" the song for a dollar, you're not buying anything but the right to listen to that song for some undetermined amount of time.

I do actually read the EULA for the software and the TOS for the store, and I'd like you to point out the parts that suggest that to you, because it doesn't gel with

Here's a simple case: What happens to "your songs" when you die?

That, of course is the least simplest case, it would be interesting to get chapter and verse on this.

In practical terms it remains sits on my machine. There is nothing that Apple can do under the current TOS to make it magically disappear from that machine. The UK license says "(ii) You shall be authorised to use the Products only for personal, non-commercial use, and not for redistribution, transfer, assignment or sublicence, to the extent permitted by law." The question is, to what extent does the law allow property to be transferred via a will, this clause not-withstanding.

It's interesting that the iTunes TOS refer extensively to 'selling products' rather than 'selling a license' throught.
 

Re:I Wanted More Anti-DRM Spin on This (5, Informative)

earlymon (1116185) | more than 5 years ago | (#25237773)

Sorry for previous post, in my mind I totally hit preview instead of submit.

As someone who has actually RTFA, Apple didn't hint that this change would shut down the iTMS - they said flat out that IF they ABSORBED the higher cost, THEN THAT would be so detrimental they'd have to shut down - and that there was NO WAY THAT THEY WOULD DO THAT.

Expert fear mongering, indeed. Allow me to accurately paraphrase for you.

1. Apple said that they wouldn't absorb additional costs - it was ridiculous to the point of causing an iTMS shutdown.
2. Apple said that shutting down iTMS is ridiculous.
3. The iTMS Terms of Sale is on the web. I'll post the link for those can read: http://www.apple.com/legal/itunes/us/sales.html [apple.com]
4. Ditto for their Terms of Service: http://www.apple.com/legal/itunes/us/service.html [apple.com]
5. NO WHERE DOES IT STATE THAT YOUR MUSIC PURCHASES ARE GOOD FOR "some undetermined amount of time."
6. iTMS TOS is governed by the laws of the State of California, USA
7. It strains reasonable imagination to the breaking point that any California court would uphold the insane scenario you present.
8. Your DRM fear mongering seems to completely overlook Apple's historical stance on DRM. From the fossil record:

From http://www.apple.com/hotnews/thoughtsonmusic/ [apple.com]

Perhaps those unhappy with the current situation should redirect their energies towards persuading the music companies to sell their music DRM-free. For Europeans, two and a half of the big four music companies are located right in their backyard. The largest, Universal, is 100% owned by Vivendi, a French company. EMI is a British company, and Sony BMG is 50% owned by Bertelsmann, a German company. Convincing them to license their music to Apple and others DRM-free will create a truly interoperable music marketplace. Apple will embrace this wholeheartedly.

9. iTMS content continues to play when one has no connection to the internet.
10. Point 9, above is an excellent simulation of the iTMS going out of business - there would be no internet connection to iTMS, your music would continue to play.

You, sir, are a total fucking idiot.

Re:I Wanted More Anti-DRM Spin on This (0)

Anonymous Coward | more than 5 years ago | (#25238013)

You, sir, are a total fucking idiot.

From your own link: http://www.apple.com/legal/itunes/us/service.html [apple.com]

d. You acknowledge that some aspects of the Service, Products, and administering of the Usage Rules entails the ongoing involvement of Apple. Accordingly, in the event that Apple changes any part of the Service or discontinues the Service, which Apple may do at its election, you acknowledge that you may no longer be able to use Products to the same extent as prior to such change or discontinuation, and that Apple shall have no liability to you in such case.

Who's the total fucking idiot now?

Re:I Wanted More Anti-DRM Spin on This (0)

Anonymous Coward | more than 5 years ago | (#25238141)

You?

Re:I Wanted More Anti-DRM Spin on This (3, Informative)

tholomyes (610627) | more than 5 years ago | (#25238195)

Way to put everything but the relevant bit in bold. The statement pertains specifically to services and products that "entail the ongoing involvement of Apple", which music does not.

Re:I Wanted More Anti-DRM Spin on This (0)

Anonymous Coward | more than 5 years ago | (#25238259)

Checking...yep, it's still you.

Re:I Wanted More Anti-DRM Spin on This (2, Interesting)

maxume (22995) | more than 5 years ago | (#25237791)

DRM appears to be working fairly well for Apple (it was other players in the market that pushed for removing it, Apple seems happy enough with whatever the status quo happens to be).

Complete Shutdown of iTunes Music Store? (4, Interesting)

sexconker (1179573) | more than 5 years ago | (#25237233)

Yeah, right.
Call their bluff, require 15 cents.
iTunes Music Store isn't going anywhere.
If anything, prices will go up a dime. (Yes, for a 6 cent increase.)

Re:Complete Shutdown of iTunes Music Store? (2, Insightful)

Corpuscavernosa (996139) | more than 5 years ago | (#25237301)

Well, the music industry hasn't exactly made the best moves regarding new technology and distribution methods. They could just be stupid enough to refuse to sell though iTunes if they don't get what they want...

Re:Complete Shutdown of iTunes Music Store? (1)

sexconker (1179573) | more than 5 years ago | (#25237507)

And Apple will fold, and jack the price up 10 cents for those songs.

Re:Complete Shutdown of iTunes Music Store? (1)

nine-times (778537) | more than 5 years ago | (#25238095)

Universal has already tried dropping iTunes as a video distribution method. It didn't seem to stick.

Problem is (3, Interesting)

Sycraft-fu (314770) | more than 5 years ago | (#25237593)

That $1 is a magic mental limit. You go over that, many people will no longer be willing to buy tunes. May seem silly but that's how it works. There are various mental limits when it comes to prices like that. There's been research done to suggest that if iTunes songs went up even to $1.10 it would result in a massive drop sales.

Re:Problem is (2, Interesting)

splatter (39844) | more than 5 years ago | (#25237695)

You are correct but there isn't anything magical about it it's called perceived value you study it in microeconomics.

http://en.wikipedia.org/wiki/Customer_perceived_value [wikipedia.org]

Re:Problem is (5, Insightful)

sexconker (1179573) | more than 5 years ago | (#25237761)

By "magical" he means there is no logic involved, and people are idiots.

Re:Problem is (1)

Mr. Jaggers (167308) | more than 5 years ago | (#25238071)

That $1 is a magic mental limit. You go over that, many people will no longer be willing to buy tunes. May seem silly but that's how it works. There are various mental limits when it comes to prices like that. There's been research done to suggest that if iTunes songs went up even to $1.10 it would result in a massive drop sales.

Hm. No, I call bullshit on that. The magic mental limit will be broken. Where else will people by music online for their magic $200 ipod? No... platform lock-in and the fact that the lions share of itunes users are very happy with it will ensure that nothing substantive changes.

Bloggers will whine for a year or so (in blogger time... in real calendar time, that's somewhere between 2-4 weeks :-) ).

<sarcasm>
Prognosticating here, but Apple is just dragging this out until "the man" forces them raise prices. They'll have no choice! They really tried to protect you, fight the good fight, but in the end, the evil empire of greed will just force them to raise prices. Well, they Apple provides such value, their product is easily worth the additional cost, but they'll still be so very sad to be strongarmed into passing it on to you.
Thank goodness the premium non-DRM tracks are still available!!
</sarcasm>

More prognosticating... non-DRM tracks won't experience the hike in price.

For those of us who already don't like the itunes/ipod ecosystem, nothing will change due to the price hike. I'm curious about the wider affects of this for other online music vendors, such as Amazon's MP3 store. Will the RIAA, et. al., ride a victory here toward renegotiating every digital distribution contract? What about little guys like cdbaby and audiolunchbox?

Re:Complete Shutdown of iTunes Music Store? (2, Insightful)

91degrees (207121) | more than 5 years ago | (#25238135)

If anything, prices will go up a dime. (Yes, for a 6 cent increase.)

Probably wouldn't happen. 99 cents is a key point. It's at the significant "less than a dollar" amount. Reduce the price to 98 cents and sales would barely go up at all. Increase to $1 and sales would drop by substantially more than the 3.3% extra they make per track. There would probably be another drop if they went up to $1.01.

Is Apple's share per song went to 24 cents, then a 10 cent increase would mean 41% more per track to Apple, but $1.09 psychologically feels substantially higher than 99 cents, and if Amazon manage to keep prices down to 99 cents then a lot of customers will go there instead.

Amazing... (4, Insightful)

paulevans (791844) | more than 5 years ago | (#25237255)

Our music in on iTunes, and they get a cut of it. Wow, Thanks Royalty Board! Thanks for taking more of our cut . . . for doing . . . nothing to help us.

Re:Amazing... (4, Interesting)

necro2607 (771790) | more than 5 years ago | (#25237447)

Hmm good point. My band's music is on iTunes, as well as that of tons of other bands I know, who are completely independent. We got our stuff onto iTunes through TuneCore who charge a pretty nominal yearly fee. No record label involved. They also don't take any cut of royalties sent from Apple. So, if any of that $0.99 is going to anyone other than either Apple or my band, somethin is screwed up there :P

Re:Amazing... (1)

Ironsides (739422) | more than 5 years ago | (#25237467)

Apple pays an estimated 70 cents of every dollar it collects per song to the record companies responsible for each track. The record companies turn over nine cents to the music publishers who control the copyrights to these tunes.

In other words, if you are a music artist as you seem to imply, you would get more money per song from this. The only question is where it comes from.

Re:Amazing... (5, Interesting)

TheLink (130905) | more than 5 years ago | (#25237483)

Yeah. There's this organisation in my country that goes around collecting money from restaurants etc.

http://www.ppm.org.my/v2/downloads/quoteEN.jpg [ppm.org.my]

I wonder what happens if a restaurant only plays music that I compose (I'm not a member and the last I checked I am not getting any money or royalties from them).

I also wonder where the royalties are really going and what the pie slices look like ;).

A complex game (5, Insightful)

stox (131684) | more than 5 years ago | (#25237297)

Apple is playing chicken with the Music Industry, and IMHO, rightfully so. The record companies should eat the increase in the royalty instead of passing it on to the consumer. They provide little value for the huge portion of the income they get already.

Re:A complex game (1)

mc900ftjesus (671151) | more than 5 years ago | (#25238103)

The record companies are getting the royalties, they aren't about to actually pay the musicians more. It's the record companies that want the money, so either Apple eats it (yeah right, they're as crooked as MS ever was) or people pay more. Their profits are probably down for the year and need to make up for more and more people getting tired of the crap they produce.

There's a 0% iTunes DRM factory is going anywhere, prices are going up and not for Apple.

Re:A complex game (1)

mc900ftjesus (671151) | more than 5 years ago | (#25238107)

0% chance it's going away, that is.

iTunes: A tool of world-wide Satanism (0, Troll)

Anonymous Coward | more than 5 years ago | (#25237339)

This is what it would be like, if the majority of people were athiests.
ATHIEST KID: Mom, I'm going to go fuck a hooker.
ATHIEST MOM: Okay, son.
ATHIEST KID: Afterwards, I'm going to go smoke pot with my friends, since it's "not addictive."
ATHIEST MOM: Okay, come home soon!

The athiest kid leaves the room. The father comes home from work several minutes later.

ATHIEST DAD: Hey!
ATHIEST MOM: Hi, honey! I'm pregnant again. I guess I'll just get another abortion, since "fetuses don't count as human life."
ATHIEST DAD: Okay, get as many abortions as you want!
ATHIEST MOM: Oh, and don't go in the bedroom.
ATHIEST DAD: Why not?
ATHIEST MOM: There are two gay men fucking eachother in there.
ATHIEST DAD: Why are they here?
ATHIEST MOM: I wanted to watch them do it for awhile. They just aren't finished yet.
ATHIEST DAD: Okay, that's fine with me!

Suddenly, their neighbor runs into the house.

ATHIEST NEIGHBOR: Come quick, there's a Christian outside!
ATHIEST MOM: We'll be right there!

The athiest couple quickly put on a pair of black robes and hoods. They then exit the house, and run into the street, where a Christian is nailed to a large, wooden X. He is being burned alive. A crowd of athiests stand around him, all wearing black robes and hoods.

RANDOM ATHIEST: Damn you, Christian! We hate you! We claim to be tolerant of all religions. But we really hate your's! That's because we athiests are hypocritical like that! Die, Christian!

THE END

Scary, isn't it?

Re:iTunes: A tool of world-wide Satanism (-1, Offtopic)

Anonymous Coward | more than 5 years ago | (#25237543)

That's great, but what's an "athiest"?

You are a dong for Jesus! Aaaand, my penis has eyes!

Re:iTunes: A tool of world-wide Satanism (0)

Anonymous Coward | more than 5 years ago | (#25237605)

Not all life is sacred, and no one demonstrates that better than the bleating shitstain that is the parent poster.

Re:iTunes: A tool of world-wide Satanism (1)

sexconker (1179573) | more than 5 years ago | (#25237733)

An inflammable atheist and a flammable theist are different things?
What a country!

Re:iTunes: A tool of world-wide Satanism (2, Insightful)

geminidomino (614729) | more than 5 years ago | (#25237573)

And Christians wonder WHY people hate them...

Idiots...

Re:iTunes: A tool of world-wide Satanism (1)

SpiderClan (1195655) | more than 5 years ago | (#25237907)

I certainly wonder why someone would hate me based on an anonymous internet post.

Re:iTunes: A tool of world-wide Satanism (1)

XxtraLarGe (551297) | more than 5 years ago | (#25238149)

And Christians wonder WHY people hate them...

I doubt the troll was a Christian, but you've decided to hate Christians based upon a decidedly non-Christian post?

Re:iTunes: A tool of world-wide Satanism (2, Funny)

beckje01 (1216538) | more than 5 years ago | (#25238205)

I'm Christian and I didn't realize people hated me I thought they just hated the loud crazy people. So since I gather that everyone does hate me. I must now hate everything that is different and force my ideas on you just so you'll like me.

Re:iTunes: A tool of world-wide Satanism (1)

earlymon (1116185) | more than 5 years ago | (#25237859)

Here's what the world would be like if the vast majority of people were atheists and gun owners:

There would be a bag limit of 2 per day for shooting narrow-minded jackasses.

There would be no penalty for going over the limit.

Re:iTunes: A tool of world-wide Satanism (1)

sesshomaru (173381) | more than 5 years ago | (#25238061)

Ripped from the headlines!!

Price breakdown (5, Insightful)

Elfboy (144703) | more than 5 years ago | (#25237353)

Apple pays an estimated 70 cents of every dollar it collects per song to the record companies responsible for each track. The record companies turn over nine cents to the music publishers who control the copyrights to these tunes.

So why can't the record companies absorb the extra 6 cents? Oh wait. They're greedy bastards...

Good (4, Insightful)

superdan2k (135614) | more than 5 years ago | (#25237367)

I think what's going to get missed in this is a "good for Apple!" variety of statement. They've created a whole new market for music, and provided a whole new revenue stream for the industry. That they've stood up to that industry previously on the issue of cost-per-track is admirable. Now they're willing to drop a whole channel that makes them a ton of money in order to hit back at the music industry's greed when most vendors would just bend over and take it.

Re:Good (1)

earlymon (1116185) | more than 5 years ago | (#25237885)

Not really - TFA specifically said that they wouldn't absorb the cost because it would down iTMS. Otherwise, you're right on.

Re:Good (1)

Gewalt (1200451) | more than 5 years ago | (#25238281)

They could also raise prices by 6 cents and continue on, business as usual. Otherwise, you're right on.

Re:Good (2, Insightful)

MozeeToby (1163751) | more than 5 years ago | (#25237973)

Now they're willing to drop a whole channel that makes them a ton of money in order to hit back at the music industry's greed when most vendors would just bend over and take it.

Well, close. I think what you meant was that they are willing to say that they are willing to drop a whole channel. Now maybe they actually will if it comes down to it, but I doubt it. Would you throw away 8% of your revenues just to make a point?

Honestly... who cares? (0)

Anonymous Coward | more than 5 years ago | (#25237385)

I think it would actually wake up the public about DRM and unfair royalties, but then the drugs wear off and I realize they're just a bunch of uncaring sheep.

If iTunes falls over, it's no skin off my nose.

Sweet! (3, Funny)

Bryansix (761547) | more than 5 years ago | (#25237403)

Apple has intimated such a change might cause a complete shutdown of the iTunes Music Store.

Finally! Then we can all go back to sharing music like we were intended to in the first place.

This is Apple playing to the labels... (1)

argent (18001) | more than 5 years ago | (#25237431)

The labels get the majority of the 99c you pay for a song. This is Apple talking tough to get the labels to accept taking most of this increased royalty out of their 70c instead of Apple's 29c.

Re:This is Apple playing to the labels... (1)

squiggleslash (241428) | more than 5 years ago | (#25237587)

I'm pretty sure Apple could charge $1.06 if they wanted to, and it wouldn't make the slightest difference in terms of sales. Rather than one industry or the other being hit, wouldn't it make more sense to pass on the charge to the customers?

Price increases happen in every industry. I don't see why music should permanently cost 99c.

Re:This is Apple playing to the labels... (1)

randyest (589159) | more than 5 years ago | (#25237891)

I'm pretty sure Apple could charge $1.06 if they wanted to, and it wouldn't make the slightest difference in terms of sales.

I'm pretty sure you're wrong, since I've read research to the contrary. Unfortunately, I'm too lazy to look for it, so I'll just leave this as-is -- it's as equally supported as your claim, so we cancel out until someone posts a link to the study.

Re:This is Apple playing to the labels... (1)

SpiderClan (1195655) | more than 5 years ago | (#25237977)

Price increases in most industries are caused by costs of production, supply and demand, or other economic forces. This is a case of "because we can" which, though it could conceivably be caused a market force, is much harder to swallow from the consumer side.

Also, given that music is by no means an essential consumer product and that there are plenty of people in fear for their financial future right now, raising the prices for no apparent reason probably won't be as harmless to the company as you seem to think it will.

Re:This is Apple playing to the labels... (1)

SpiderClan (1195655) | more than 5 years ago | (#25237993)

Damn.

"...though it could conceivably be called a market force..."

Re:This is Apple playing to the labels... (1)

PunkOfLinux (870955) | more than 5 years ago | (#25238017)

Why shouldn't it cost 99c?
The only reason this is occurring isn't because of some fundamental increase in the price of delivering good. It's happening because someone wants to line their pocket.

Re:This is Apple playing to the labels... (1)

Creepy Crawler (680178) | more than 5 years ago | (#25238019)

Wow, talk about the WRONG question to ask.

In terms of economics, how much should an item cost if supplies are limited and demand is high? A lot.
How much should an item cost if supplies are plentiful and demand is low? Not much.
From a few datapoints, we can see there's an inverse relationship between supplies vs cost and a direct relationship between demand and cost.

I wonder what happens around the area where supply = infinity ... Or better yet, what is the inverse of infinity? That's how much I'm willing to pay, plus or minus .10$

Someone makes Apple look saintly (4, Insightful)

David Gerard (12369) | more than 5 years ago | (#25237435)

Apple is evil [today.com] , but the music business is evil [rocknerd.co.uk] and stupid [rocknerd.co.uk] . If you were going to pick someone to make Apple look good, you couldn't pick better villains.

Do the record companies realise they're competing with free? Apple realise this. Raising the prices will drive away customers who do have another option. No-one buys music because it's the only way to get it, anyone who buys music these days does so because they want to.

BitTorrent: because fuck you, Hollywood!

Please, please, please let this happen. (3, Funny)

snoig (535665) | more than 5 years ago | (#25237455)

Having users that have no desire to install iTunes and all the Apple related crap on their work computers would make my life so much easier.

And... (1)

MikeRT (947531) | more than 5 years ago | (#25237463)

Where is the recognition of the fact that they're not helping Apple absorb any of the costs of this program? Credit card processing fees aren't exactly cheap, for one thing. As long as we're having government decide how to make everyone play nice, let's make them go all the way.

Re:And... (0)

Anonymous Coward | more than 5 years ago | (#25237753)

Who cares? Why can't people just buy CD's and rip their own non-DRM files themselves? Granted, there is a demograph that would like 1 track at a time. I know CD singles are immensely popular in Japan, they could be just as easily popular in other regions. And they are dirt cheap.

I never understood (and still don't understand) why people choose iTunes and DRM when they clearly don't have to. Is it Apple-brand elitism (ego-smug)? Stupidity? Ignorance? Or is it some combination of them all?

Obsolescence? (1)

TastyCakes (917232) | more than 5 years ago | (#25237481)

In a world where more and more people are buying their music directly from iTunes, what function do record companies serve, exactly? And how much money does Apple pay per song to these arguably vestigial middle men?

Re:Obsolescence? (0)

Anonymous Coward | more than 5 years ago | (#25237783)

They serve as copyright holders at this point and at least for the next 30+ years hold the key to music people will want to listen to.

Re:Obsolescence? (1)

Taibhsear (1286214) | more than 5 years ago | (#25237821)

In a world where more and more people are buying their music directly from the artists, what function do record companies & iTunes serve, exactly?

FTFY

Finally... (1)

ZackZero (1271592) | more than 5 years ago | (#25237505)

Someone on a corporate level is starting to play against the labels. Granted, there may be some backlash from this, but if Apple doesn't budge (and aren't they one of the largest online music retailers?) won't other online music retailers join the cause?

70 Cents? (3, Insightful)

whisper_jeff (680366) | more than 5 years ago | (#25237511)

I think, at 70%, Apple more than pays for the right to sell the songs. Music companies don't want to pay that additional hike to copyright holders? Tough. They're making 70% off each sale - they make more than enough to pay the additional fee. Greedy pricks.

Deserves Apple Right (-1, Flamebait)

sdemjanenko (1296903) | more than 5 years ago | (#25237519)

Apple already takes too much of the pie. I mean if such a small portion goes to the artist then you would think they would be able to do it so much cheaper especially considering the volume of their sales. Even moreso, I don't see why the RIAA would go after people who download music when Apple doesn't give artists much money anyway. Maybe this is exactly what Apple needs to find out - people dont love them.

Re:Deserves Apple Right (1)

aesiamun (862627) | more than 5 years ago | (#25237853)

70% of every sale goes to the Record Company. Apple keeps 30% for network costs, credit card processing, and growth.

Yes, greedy greedy Apple.

Status quo (0)

Anonymous Coward | more than 5 years ago | (#25237525)

Apple won't do anything. The rates were 9 cents before, so nothing has changed.

Profit, not cost (1)

QuietLagoon (813062) | more than 5 years ago | (#25237527)

Right now, it's 9 cents a track which adds up, when you sell 2.4 billion tracks each year.
.

It is not as much the total yearly cost, but more the cost per song that Apple sells for $0.99 a pop. The additional royalty charge may just make a song cost more to Apple than Apple can recoup from selling it.

Really? (-1, Troll)

Anonymous Coward | more than 5 years ago | (#25237539)

You mean Apple... the fun loving, hip, geek chic computer company is trying to completely dominate every aspect of an entire market?

I can't picture that.

Jesus, really, it's a good thing Apple has as little market share as it does, because we'd probably be about 10 years behind in this game if they ran the show.

They would be dumb to do this (2, Interesting)

mcsqueak (1043736) | more than 5 years ago | (#25237551)

And by "they" I mean both parties, Apple and the music industry.

On one hand, I understand Apple's stance. The recording industry would be stupid if they made moves that could shut down what has so far been the most popular online music store to date. In my opinion, it is pretty F-ing stupid to try and pass a royalty hike at this point and time.

My thinking is this: Apple is doing all the hard work of running the store, and the record industry is profiting off of this additional sales stream. If they pass the royalty hike, they might not get their increased royalty revenues - likely, they'll get NO MONEY AT ALL if Apple goes through with its bluff of shutting down iTunes. Which is better, earning several million dollars a year in revenues from iTunes, or none at all? Stop being so greedy already.

On the other hand, how wise would it be for Apple to kill off part of what makes the iPod so popular? I'm a iPod owner who has never bought a track from iTunes, but obviously there are a LOT of people out there who use it. I don't think it would be so smart for Apple to shut such a service down... I wonder if their iPod sales would suffer as a result.

Re:They would be dumb to do this (0)

Anonymous Coward | more than 5 years ago | (#25237727)

Actually, if Apple shuts down the iTunes store there should be a decent-sized public backlash. If you think Apple can't spin that toward hitting the people that so richly deserve it you're seriously underestimating their marketing department.

Re:They would be dumb to do this (0)

Anonymous Coward | more than 5 years ago | (#25238257)

But it would cost apple over a million dollars a day though.

Re:They would be dumb to do this (0)

Anonymous Coward | more than 5 years ago | (#25237787)

The problem is the record labels don't really care if iTunes goes away. They are happy with the business model of selling CDs for $15 a pop.

For them, they will be gleeful if all online music stores closed up shop. It will help clinch their hold on controlling what bands people listen to, and then they can focus their efforts on Washington to get more anti piracy laws passed.

Re:They would be dumb to do this (1)

mcsqueak (1043736) | more than 5 years ago | (#25237881)

For them, they will be gleeful if all online music stores closed up shop. It will help clinch their hold on controlling what bands people listen to

True enough. I guess I was working under the assumption that they would actually want to increase overall listeners and revenue and not just control everything, which seems to be their real objective.

Not a problem (3, Funny)

rlp (11898) | more than 5 years ago | (#25237625)

Admittedly digital music is a luxury. But the economy is doing so well that people won't mind spending a little more on their music. Oh, wait ...

What's the justification for this increase? (1)

Egdiroh (1086111) | more than 5 years ago | (#25237633)

Let's look at what's been changing in the download industry that might justify the change.

Is the cost per track for the end user going up: No, it's holding stable and in some situations going down.

Is the distribution cost for the track going down: Track bit-rates have gone up, and the size of overall catalogue has gone up, so there is more to hold and distribute per track.

Have the copyright holders done anything to enhance the value of their existing copyrights: No.

The only remaining justification is inflation, which in this case is an Ouroboros. Raise the royalties because of inflation, that will raise the cost of tracks for end-users further diminishing the purchasing power of the dollar, which leads to more inflation. Yipee. Way to destroy our economy!!!!

Won't change the way I get my music. (1)

johnlcallaway (165670) | more than 5 years ago | (#25237757)

First .. Wal*Mart decides to shutdown it's DRM support system, so no more transferring music to another computer unless you quickly burn everything to CD.

Now Apple threatening to shutdown it's music store, probably putting everyone in the same boat in a few years when they decide to not support servers that aren't generating revenue.

I think my need for Apple products stays as 'no need' and my need to download music at 'slight need'.

I try to buy only DRM free CDs and rip everything to disk. Or buy downloads I can remove DRM from.

When DRM starts shutting off CDs, I'll just record the analog signal.

Hmmm...I think I used to do that in the 70s to 8-track tapes. The more things change, the more they stay the same.

strange royal tea brew that's good for you (0)

Anonymous Coward | more than 5 years ago | (#25237769)

that would be kombucha. free for the making.

Are you kidding me? (1)

Taibhsear (1286214) | more than 5 years ago | (#25237795)

15 cent royalties? The damn mp3s should only cost 15 cents a piece. You're getting 1/3 the quality of a lossless track at most. And you are paying the same or more than a physical cd would cost from a physical store with all the liners and art. You people are seriously getting ripped off. I really wish places like eMusic would start getting more artists, and more mainstream artists, and higher quality tracks. I just don't understand why no one seems to offer lossless tracks (for non-obscure non-live artist recordings).

Re:Are you kidding me? (1)

Moridineas (213502) | more than 5 years ago | (#25238011)

Why not lossless? Because most people don't care that much?

15 cents a song? I think you would take a BEATING on server costs, bandwidth costs, staff costs, and credit card processing costs. But hey, if you want start a service selling tracks for 15 cents, be my guest!

For me (and I would guess a lot of people) itunes store works fine. I rarely if ever buy a whole CD, just single tracks--impulse buys. Don't really care too much if its lossless as most of the time the encoding sounds good enough for me on my etymotic headphones, my laptop shit speakers, and my sound system.

Then again, I'm only a wannabe borderline semi-audiophile ;)

Come on people... (1)

Tibor the Hun (143056) | more than 5 years ago | (#25237889)

Come on folks, you should realize that Apple would never shut iTunes store down. How would they then sell iPods?

They are simply posturing for the day when Steve has to say "We've tried every alternative option but the Labels wouldn't let us. So, knowing how much you love music, and how much we at Apple love music, we decided to split the cost with you. From now on, songs will be $1.05 (or whatever), we'll pay for half the Labels' demands, and we think you'll love being able to use iTunes and enjoy your music."

Cheers and jeers.

Now, we all know that Jobs doesn't like being played, so during the next re-negotiations with labels, I think Steve will find a way to really hurt them. Hell, maybe even make them drop the DRM.

Wait! Why does Apple care? (2, Interesting)

91degrees (207121) | more than 5 years ago | (#25237959)

Isn't Apple's agreement with the record labels? Surely the 9 cents comes out of the labels' share. That's what the cnn article implies. So instead of 29 cents going to Apple, 61 cents to the label and 9 cents to that guy who did nothing except all write and perform the song, it would be 29 cents to apple, 55 cents to the label and 15 cents to the worthless waste of space.

Why does Apple still use DRM for Music? (1)

sesshomaru (173381) | more than 5 years ago | (#25237971)

Why is it that the RIAA can pressure Apple with threats to make them use DRM, but not Amazon?

Amazon is currently selling DRM free MP3s, heres' a sample page:

Amazon MP3 Store [amazon.com]

They'll work on whatever cheap crummy MP3 player (or high quality MP3 player, or iPod) you want to use. You can make as many copies as you want, record MP3 CDs, the works. Shouldn't the RIAA be crying bloody murder?

Or is it just that the pressure from RIAA is just a pretext, and Apple doesn't want people to be able to easily use their competitors players? I'm not being cynical, it just doesn't make sense to me since even not technically savvy people can undertand the value of un-DRMed MP3s over the alternative, iTunes should have a competitive disadvantage.

Re:Why does Apple still use DRM for Music? (1)

howdoesth (1132949) | more than 5 years ago | (#25238299)

The sole reason that the labels allow Amazon to sell DRM free MP3s is so that Amazon can sell music that plays on iPods. The labels hated the power Apple had as the only store that was selling music that could play on the iPod, which is the only music player anyone cares about. So much so that they were willing to give up on DRM in order to weaken Apple's hand if only just a bit. Apple should be at a disadvantage, but the fact that iTunes comes bundled with your iPod and that most people really truly don't care in the slightest about DRM means that Apple is perfectly happy to keep its consumers locked in.

Has it ruled yet? (1)

davew (820) | more than 5 years ago | (#25238047)

Wait a second. Has the Copyright Royalties Board ruled yet? They're due to rule today, but the BBC article is from yesterday, and the CNN one from Tuesday. I see nothing on a ruling on google news. Anyone?

6 cents won't affect their business (1)

daedae (1089329) | more than 5 years ago | (#25238137)

As I commented here [mog.com] , I don't think Apple will be forced to absorb the increase in royalty. They'll be able to pass a 6 cent increase on to most of their customers without chasing them away.

Apple Records Inc (2, Insightful)

jayhawk88 (160512) | more than 5 years ago | (#25238201)

The fact that music labels don't (or perhaps don't want to) see what they might be doing by forcing Apples hand here is just amazing. What's to stop Apple from getting into the record label business to support iTunes? Like they couldn't sign a thousand acts tomorrow if they promised them prime promotion in the iTunes Music Store? They might not be able to get the big names right away, because of existing contracts or just general reluctance from artists, and they would certainly lose most if not all of their back-catalog, but Apple absolutely does have the kind of capital necessary to pull this off, and a huge built-in market that is essentially tied to their wildly popular distribution mechanism.

Losing big name artists from major labels would certainly hurt iTunes sales, but again, Apple certainly has the kind of cash necessary to subsidize an iTunes record label until it found it's footing (and until major artists realized how much iTunes sales really meant to them in this day and age). 100 million iPods aren't just going to disappear overnight, people will still turn to iTunes for their music. So long as they could keep setting the trend with their iPod line, it's hard to believe that an iTunes label would not eventually start scoring major artists, or perhaps start creating their own major artists from little known artists/bands eager to sign with the iTunes label.

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