Posted 10/01/08 at 07:16:50 PM by Pulkit Chandna

Apple’s iTunes service is to legit music downloads what Napster was to file sharing. Napster went out of business more than seven years ago after loosing a fierce legal battle against the music industry. Now, Apple’s iTunes might go out of business despite occupying legally sound ground.

Apple has threatened to close its iTunes music store, if the Copyright Royalty Board approves a hike in the royalty rate on music sales. The board is to give its decision on Thursday. The National Music Publishers’ Association is pleading for a hike of 66% in royalty rates. On the other hand, digital store owners are demanding a cut in royalty rates.

"If the [iTunes 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,” Apple’s VP Eddy Cue warned the board in a filing.

Do you believe Apple can take such a drastic step?

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Software, apple, itunes, royalty rates

Posted 09/24/08 at 06:15:37 PM by Andy Salisbury

The online music industry has always been a touchy one, but today the world came a step closer to ending online royalty disputes. An agreement that’s being called a “breakthrough that will facilitate new ways to offer music to consumers online,” songwriters, music publishers, record labels and digital music websites have concluded a seven year dispute over mechanical royalties and limited music downloads.

Mechanical royalties are the fees paid to songwriters, composers and publishers of music, not the person that only preformed it or the record company that produced the recording. Limited music downloads are downloads with restrictions attached, such as the model used by Napster To Go. iTunes, however isn’t considered limited use because you can listen to your songs as often as you want, without a monthly fee.

As landmark as this settlement is, it still leaves a big hole on the controversial topic of Internet radio. Sites such as Pandora and Live365 remain in a high-stakes standoff with SoundExchange, the company in charge of collecting the fees for artists and record companies. The reason that sites such as these were left out from the normal Internet radio agreement is because they allow users to select the music that they want to listen to, as opposed to simply listening to a pre-determined stream of songs.

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RIAA, itunes, music, Napster, Internet radio, Pandora, Live365, royalty rates