Apple's Threat To Shut Down iTunes Forces Hand

By Eriq Gardner

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.