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Music royalty hike turned down by CRB

updated 06:00 pm EDT, Thu October 2, 2008

Royalty hike denied


The planned royalty increase for CD and digital music downloads was slapped down by the Copyright Royalty Board, according to MarketWatch. A three-judge panel oversaw the decision, declining a raise from 9.1 cents per song to 15 cents. The royalty increase faced stiff opposition from music stores, with Apple threatening that, should the royalty hike go through, it would cease operations of the iTunes music store. iTunes is currently the largest music retailer in the US, having recently pulled ahead of Walmart.

After hearing of the planned royalty hike, iTunes VP Eddy Cue suggested that iTunes would close, since they could offer no mutually beneficial alternative. iTunes would either run at a loss, or they would have to charge more for music, which would infuriate customers.


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  1. Guest

    Fresh-Faced Recruit

    Joined: Nov 1999

    -27
    10/02, 06:36pm | report spam | Reply |

    check ur awareness level

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    '

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  1. jdonahoe

    Fresh-Faced Recruit

    Joined: Jul 2006

    +1
    10/02, 06:45pm | report spam | Reply |

    Doesn't ipodnn filter

    Doesn't ipodnn filter spam?

  1. chas_m

    Fresh-Faced Recruit

    Joined: Aug 2001

    -1
    10/02, 07:00pm | report spam | Reply |

    More to the story

    Apple (and Steve in particular) are very artist-friendly, so I really have to wonder if there isn't more to this story than meets the eye.

    I've been searching through various articles looking for comments from, you know, actual recording artists. Surprisingly, not much to be found.

    For the record, I'd gladly pay the extra 15-20¢ per song (you know that's how much it would become) for the artist to get more money IF and only IF the file is DRM-free. Maybe Apple could use that as a leverage tool.

  1. Guest

    Fresh-Faced Recruit

    Joined: Nov 1999

    +2
    10/02, 09:20pm | report spam | Reply |

    Drawing the line.

    Apple is not, and should not be, the place where songwriters are supposed to negotiate increases in royalties.

    Royalties to artists and songwriters are inherent in their contract. Apple just sells content. They take 30% (like a retail margin), and leave 70% to the content owner.

    The content owner is responsible for paying the artist, the songwriters, etc. This happens by the terms of the contract.

    Artists and songwriters are getting a rediculous deal, and that has been the way it has almost always been. They are usually screwed over by the owner (label), in more ways than just royalty rates. For artists and songwriters, the content owners should be paying a lot more to them, but these companies take all the profit.

    Repeat, this is not an Itunes problem, any more than it would be a Tower Records problem. Itunes provides better sales data faster, but that's the only real difference.

    The reason the Apple exec said that was because he knows how the labels are. They would insist that Apple raise prices to compensate for the dime lost, when it really isn't Apple's problem. The content owners do need to pay people better, but they will try to squirm out of it any way they can. Don't be misled.

  1. testudo

    Fresh-Faced Recruit

    Joined: Aug 2001

    +1
    10/03, 09:44am | report spam | Reply |

    Re: drawing the line

    Apple is not, and should not be, the place where songwriters are supposed to negotiate increases in royalties.

    Man, do people just think everything is about Apple? NO ONE was trying to negotiate with Apple. This is the Copyright Review Board, who defines how much royalties are required per sale, use, etc. That was the whole point of this article.

    Royalties to artists and songwriters are inherent in their contract.

    No, they are not. Royalty collection and payments may be inherrent to their contract, esp. if the artist changes the percentage for their contract. But this is all about HOW MUCH! The CRB defines how much money goes to the artists, musicians, copyright holders, etc, etc, etc, based on whether it was sold, broadcast on radio, internet, satellite, etc.

    The ONLY thing this had to do with Apple was that when you buy a song, so much has to go to cover royalty payments, so any increase would either come out of apple's pocket (as it would be, say 77 cents vs. 70 cents per song) or increase in cost.

    Apple just sells content. They take 30% (like a retail margin), and leave 70% to the content owner.

    Not how it works. They are a distributor, not just a seller. So, every sale requires a certain payment in royalties. They aren't like BestBuy, who purchase the CDs from the distributor for resale. Apple isn't prepaying for the digital music. Therefore they take whatever they don't have to pay in cost. Costs change. This isn't the AppStore, where Apple can just claim some "We want 30% for upkeep, you can keep the rest". The amount Apple pays out would be affected by this, as they'd have to pay 7 cents more in royalties to whoever collects them (which may be the label, but it may not - bear in mind the label doesn't collect the royalties for radio playback, that's some collection agency arm like SoundScan).

    The content owner is responsible for paying the artist, the songwriters, etc. This happens by the terms of the contract.

    Nope, at worst the content owner is responsible for DISTRIBUTING the royalties that are collected.

    Artists and songwriters are getting a rediculous deal, and that has been the way it has almost always been. They are usually screwed over by the owner (label), in more ways than just royalty rates.

    Actually, in all ways BUT royalty rates. As I said, royalty rates are pre-defined by the CRB. These don't change. They may get screwed by the label in not getting their payments, not making the money they thought, losing money because they signed over their royalty payments to the label to cover expenses, but the rates themselves are not label defined.

    Repeat, this is not an Itunes problem, any more than it would be a Tower Records problem. Itunes provides better sales data faster, but that's the only real difference.


    Repeat, it IS NOT A PROBLEM. It is an iTunes issue (and an Amazon issue , and a Napster issue , etc). It is a distributor "issue".

  1. testudo

    Fresh-Faced Recruit

    Joined: Aug 2001

    +1
    10/03, 09:46am | report spam | Reply |

    Re: more to the story

    Apple (and Steve in particular) are very artist-friendly, so I really have to wonder if there isn't more to this story than meets the eye.

    Really? Explain this then (from the previous article):
    The Digital Media Association, a group representing online music vendors such as Apple, has in fact pushed for lower publisher royalties, as little as 4.8 cents or 6 percent of applicable revenue.

    Doesn't sound too artist-friendly to me.

    I know, they think if their royalty payments get cut, the amount going to the label gets cut, and then Apple would reduce the price of their music! Yeah, that's it. It's all a part of Apple's plan for 94 cent music.

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