Katie MarsalAverting 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.
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.
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19 Comments
Good deal! Way to use the muscle in a positive way Apple!
The government setting the price for ringtones. A tax break provision for the makers of toy wooden arrows inserted into the latest version of the "Financial Armageddon Avoidance" bill.
We recently watched the excellent HBO miniseries "John Adams." I'd say that he along with the other founding fathers of our country are spinning in their graves about now. Every two years, one entire house of Congress (House of Representatives) is sent packing, and despite the fact that the public's approval rate of Congress is probably LESS THAN HALF that of Bush, we proceed to rehire almost all of them back again (and again, and again, and yet again). Isn't that Einstein's definition of the word "insanity"? (Doing the same thing over and over again and expecting different results.)
Only suckers pay for ringtones.
Only suckers pay for ringtones.
Agreed. I just the "old telephone" ring on my iPhone!!
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.
Why is a ringtone, which by definition is a small fraction of a complete song, and generally is missing the vocal's for the song, worth almost 3 times the value of the complete song including vocals? Sure, the carriers have been gouging for ringtones, just because they can, by using their walled-gardens to artificially limit supply. Is this just the gov't way to forcing them to spread the wealth (as in, since you are gouging your customers, you should be paying artists more for what your are selling)?