Could a digital music royalty price hike force iTunes into subscriptions?
There’s some talk today that if the National Music Publishers’ Association manages to increase the royalty rates for music bought from online music stores, Apple iTunes could shut its doors. That won’t happen. But it could force iTunes to change its business model. The Copyright Royalty Board is meeting Thursday in Washington to set a new price for royalties. While the National Music Publishers’ Association wants the rate raised from its current 9 cents a track to 15 cents (a 66 percent increase), the Digital Media Association, which backs Apple and other online music publishers, wants the rate decreased to 4.8 cents a track. The increase is much more likely than the decrease, according Fortune. This led iTunes vice president Eddy Cue to tell Fortune: “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. Apple has repe
