iTunes "Closure" Threat Passes as Royalties Unchanged

Whether Apple would have carried out it’s threat to close down its iTunes Store rather than operate at a loss will never be known.

Apple had raised the possibility of shutting iTunes if the US Copyright Royalty Board decided to increase the royalty fees paid to publishers and songwriters.

But the CRB opted to keep rates the same for digital music stores late last week, so removing any need for Apple to make good its closure threat.

The three-member CRB kept the royalty rate at 9.1 cents, and mandated a 24-cent rate for ringtones.

The board has never before established mechanical rates for digital files.

With that little problem behind them Apple can now focus on other threats to iTunes’ dominance of the music download scene – like the launch of Nokia’s Comes With Music program.