The group in charge of deciding how much money need to be paid is called the Copyright Royalty Board, and they want to raise the royalty rate to 15 cents per song. This doesn't sound like much, but considering the current rate is only 9 cents per song this could raise the actual prices of the song out of the convenient price range. With the new rates, songs on iTunes would raise from the current 99 cents a song to $1.05 per song. Personally I think that if iTunes raised its prices to that that more people would turn to illegally downloading their music more than they already do.
Apple apparently feels the same way and are trying to switch to a percent of revenue royalty rather than a price per song. Apple thinks that 6% of the revenue is fair, while the copyright owners (those who receive money from the royalties) think that 8% would be fair. Either of those would actually make the current rates drop down to around 6 cents a song.
Even though the prices are only different by a few cents, the result of the Board's decision is very important to all online music stores, and even online radio. Many online radio sites can only survive if the current rates stay the same. Pandora, a popular online radio site, is worrying about having to shut down. They've had these problems before when royalty rates for online radio went up, but they managed to stay online by putting up more ads, but they can't keep adding more advertisements forever and they may have to shut down if the prices go up again.
The decision made by the Copyright Royalty Board will last for the next five years, and we'll have to wait and see if their decision affects any of the current online music sites that many people enjoy everyday.
Story taken from TechCrunch
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