craveonline

Like the rich kid with all the toys in the sand box (except maybe Kid Rock's), Apple is threatening to shut down their iTunes online music store if artist royalties for downloaded tracks are increased.

The Copyright Royalty Board (CRB) will decide Thursday whether they will grant the National Music Publishers' Association's request to increase royalties on songs bought from online music stores. The association wants the rates to be increased from the current 9 cents to 15 cents.

Apple is the world's biggest online music store. They're making an absolutely crushing killing in the industry. So naturally, they're strongly against the increase of the rates. Agreeing would be like Wal-Mart deciding its employees were real people and deserved proper health benefits. If the small-town store crushers did that, they might have to slow the pace on their quest to turn all of middle america into a flourescent-lit parking lot.

Apple released a statement to the ruling body last year, promising to shut down iTunes rather than raise the songs' prices in order to afford the higher rates if such move would be implemented.

Eddy Cue, Apple's iTunes VP, wrote in a statement to the Times of London: "If [iTunes] was forced to absorb any increase in the ... royalty rate, the result would be to significantly increase the likelihood of the store operating at a financial loss -- which is no alternative at all. Apple has repeatedly made it clear that it is in this business to make money, and most likely would not continue to operate [iTunes] if it were no longer possible to do so profitably."

It's not clear if Apple plans on carrying out that threat - in fact it's highly unlikely - but if it does, it will mark a massive turning point in what's currently the leading manufacturer of electronic status symbols. More than likely, however, Apple is aggressive trying to gain leverage before the CRB decision is made.

They could very well pass the additional cost on to the consumer, rather than sacrifice a massive chunk of Apple's business. This is starting to sound a lot like what's going on in the economy...