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, Amazon.com 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."
October 2, 2008; 5:24 PM ET
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