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What's A Song Worth? Still about 9 Cents, and iTunes lives

A federal panel ruled yesterday that song publishers and writers are entitled to 9.1 cents royalty for each song downloaded, a ruling that holds the status quo and apparently keeps Apple's iTunes in business.

In a proceeding before the Copyright Royalty Board, song publishers had argued that the per-song fee paid to publishers should be boosted from nine to 15 cents.

But Apple's iTunes vice president Eddy Cue had warned that the hike could sink their popular download service, where songs routinely sell for 99 cents.

After the CRB simply held the rate today, representatives for all sides professed to be pleased.

"The fact that we did not get any cuts, we view as a big positive," said David Israelite, president and CEO of the National Music Publishers Association. "It's a big victory for everyone who cares about music."

Israelite also dismissed the idea that a higher rate might have forced Apple to shutter iTunes.

"I found the threats to be hollow," he said.

Apple pays an estimated 70 cents per song to the record companies. The record companies pay the nine cent royalty fee to the publishers.

Jonathan Potter, executive director of the Digital Media Association, the trade group whose members include iTunes, and other online music stores, was similarly "pleased" with the decision.

"During this challenging time for the music industry and digital stores and services, we are pleased with the CRB's decision to keep royalty rates stable for the next five years," Potter said in a statement. "Keeping rates where they are will help digital services and retailers continue to innovate and grow for the next several years, which will benefit songwriters, artists, labels and publishers."

By Peter Whoriskey  |  October 2, 2008; 5:24 PM ET  | Category:  Peter Whoriskey
Previous: Sirius Unveils New Pricing Plans, But Cost Benefits Unclear | Next: Microsoft's Mundie: U.S. Broadband Efforts 'A Total Policy Failure'

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Please email us to report offensive comments.

here's the kicker. apple doesn't make their money off of itune song sales. that's chump change. they make their money off of the sale of ipods. so in actuallity, they should share some of the profits of ipod sales with composers/publishers. and that will happen when monkeys fly our of my butt. these are bad times for composers.

Posted by: rcm | October 2, 2008 8:08 PM

I don't understand why its a bad time for composers.... the label takes 61 cents a song for what exactly??

Posted by: Kiwi | October 2, 2008 8:20 PM

This is what it should be:

Apple 20 cents, publishers/songwriters 20 cents and the record company 60 cents.

This is MORE than fair. The record company is taking TOO much of the proverbial PIE.
They no longer have the MECHANICALS expence.

Posted by: Sharon Dennis | October 3, 2008 1:51 PM

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