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Apple: "If royalties increase, iTunes will lose"

Thursday the Copyright Royalty Board (CRB) will decide whether or not to accept the request from the association of music publishers to increase the percentage paid to artists from 9 to 15 cents. If the increase is approved, Cupertino declares that iTunes will no longer be profitable for Apple and that closure may be decided.

The threat of closing iTunes was expressed by Eddy Cue, the manager of iTunes, in a document submitted to the CRB last year, in relation to the increase in the price of 99 cents for each single song downloaded. The threat of closing iTunes contemplated by the Apple manager even if Cupertino was forced to take charge of an increase in royalties.

"If the iTunes Store were forced to absorb any increase in the royalty rate, the result would be to increase the probability of operating at a loss, which is not an alternative." Recall that Eddy Cue's statements date back to last year: Cupertino has not released recent official statements regarding the matter.

Recall that of the 99 cents of the cost of a song, only 29 cents are left to Apple while 70 cents are passed to the record companies, which in turn pay the artists 9.1 cents for copyright. Fortune notes that n Apple n the record companies are willing to take charge of the increase in royalties on which the CRB will decide by Thursday, thus generating a particularly tense situation.

The association of RIAA record companies continues to record declines in CD sales, 20% only in the past year, while sales of digital albums have grown by 46% in the same period. Interviewed by Fortune, David Israeli, president of the National Music Publishers Association, said he opposed any attempt by Apple and its associated music labels to establish a fixed royalty rate, adding that: "Apple wants to sell songs at affordable prices. to sell iPod. We don't earn a penny on selling an iPod. ”