Apple Threatens to Close iTunes – [Briefly]

Posted on September 30th, 2008. Written by Arron.

The National Music Publishers’ Association has requested an increase in royalty rates for music-related items downloaded from Apple’s iTunes Music Store. If passed, the increased rates will force Apple to consider even continuing to run iTunes as a music distribution center.

Apple have stated they only continue to keep iTunes available to it’s user base because it is profitable, and running it without profiting, is not an option …

With it’s 50M active customers, in April 2008, Apple announced iTunes was officially the biggest digital music distributor in the US.

“We launched iTunes less than five years ago, and it has now become the number one music retailer in the world,” said Eddy Cue, Apple’s vice president of iTunes. “We are thrilled, and would like to thank all of our customers for helping us reach this incredible milestone.”

But in a recent request from a controlling party, The National Music Publishers’ Association, are requesting for the retail prices of tracks bought on iTunes to increase dramatically. They say they want more profits going to the artist themselves, rather than Apple. In response to this, Apple have re-stated their intentions to potentially close the iTunes Music Store if this request is past in a court of law this Thursday.

“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,”

Cue wrote.

“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.”

Via: Mac Rumors