Apple's Threat To Shut Down iTunes Forces Hand

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Apple's Threat To Shut Down iTunes Forces Hand

Fri Oct 03, 2008 @ 03:36PM PST

By Eriq Gardner

Apple_ip_060706 Apple Corp.'s hardball tactics appears to have paid off.

Many expected the Copyright Royalty Board to raise the rate paid to songwriters and publishers on digital music sales from nine cents per song to 15 cents.

Then Apple threatened to walk away from the online music business altogether, shutting down iTunes if the measure was approved. CRB seems to have taken the threat seriously, deciding yesterday to freeze the rate at nine cents.

Publishers didn't walk away empty-handed, however. CRB has imposed a 24-cent rate on ringtones. For anybody who thinks it's crazy that consumers pay $3 for a 10-second clip of a full song that costs just $1 on iTunes, the price-tag for these mobile phone luxuries won't be getting any better.

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The Hollywood Reporter, Esq. blog focuses on how the entertainment and media industries are impacted and influenced by the law. It is edited by Matthew Belloni with contributions from veteran legal reporter Eriq Gardner and others. Before joining The Hollywood Reporter, Belloni was a lawyer at an entertainment litigation firm in Los Angeles. He writes a column for THR devoted to entertainment law. Gardner is a New York-based writer and legal journalist. Send tips or comments to [email protected]

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