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Copyright board leaves music royalty payments unchanged

Averting a potentially drawn out conflict over music royalties at iTunes and other online stores, the Copyright Royalty Board on Thursday said it would preserve the same royalty rate as today for CDs and downloadable songs.

A three-person panel of judges determining the changes for the Board said labels would still have to pay the same 9.1 cents per song as they do today, rejecting calls by the National Music Publishers Association and connected artists to pay as much as 15 cents per song.

The decision brings a quick end to an argument between store operators and musicians where both camps had said their opponent's requests would be unsustainable. While artists have long called for better income for content sold, Apple in a statement warned it might need to close iTunes if the royalty increase took effect and labels were unwilling to soak up some of the costs.

Apple currently operates iTunes on minimal profit and claims it would take losses on each sale if it didn't raise prices, a move which it also believes would be untenable in the current market.

In a surprise move, however, the Copyright Royalty Board has also set a royalty rate per ringtone of 24 cents, effectively setting a government-determined rate for the first time. Ringtone fees in the US have until now been set through individual negotiations, which often leads to significantly varying prices and a limited selection as certain artists or labels may refuse ringtones due to fundamental disagreements over prices.

None of the involved parties have commented on the ruling as of press time.