iTunes Store may be shutdown

The Copyright Royalty Board will meet today to apply the requested increase for sales of digital music. The prices will be lifted by 66%,  from 9 cents to 15 cents per track. The problem is that this rise needs to be paid either by the consumer, Apple or the record company.

Eddy Cue, vice president of iTunes stated:

“If iTS (iTunes Store) were forced to absorb any increase in the mechanical royalty rates, 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 repeatedly made clear that it is in this business to make money, and would most likely not continue to operate iTS if it were no longer possible to do so profitably”.

While CD sales recorded a fall last year of 20%, the digital music sales rose %46 last year. With no doubt, the record companies will try to reduce their losses and gain more in the digital area, probably leaving consumers or stores to “absorb” the rate increase.

iTunes currently holds 85% share of the digital music market, the record companies can’t afford to see iTunes shut down.

    Sphere It