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iTunes future depends on royalty payments issue

iTunes future depends on royalty payments issue

Three Washington judges will decide on Thursday what royalties music publishers should get from sales through online stores like Apple's.

At present, iTunes pays 9.1-cents per track in royalties to publishers, though the National Music Publishers' Association wants this raised to 15 cents, arguing that there's lower cost of production for digital goods, arguing this means there's more cash in the pot to share out.

Major labels, Apple and other music retailer members of the DiMA (Digital Media Association) want the royalty reduced to 4.8 cents.

Apple has threatened to close its store if the ruling goes against its wishes. Eddy Cue, vice-president of iTunes, told the three judges - who sit on the Copyright Board board, "[Apple] is in this business to make money, and would most likely not continue to operate [iTunes] if it were no longer possible to do so profitably."

The judges will also set "mechanical" royalties publishers earn from mobile ringtones and compact discs.

While the decision should be made today, it may not be made public until later this week.


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