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Apple 'holding its customers to ransom'

British web entrepreneur not happy with threat of iTunes shutdown

October 2nd 2008 | Tell us what you think [ 6 comments ]

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Will the iPod soon be without its store?

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Apple has said it will shutdown its iTunes store if a planned increase of online music royalty payments goes ahead.

The computing giant has waged war with the music industry by threatening to shut its store, unless royalties paid out to musicians stay the same.

At the moment musicians claim nine cents of every track sold. This is set to increase by 66 per cent to 15 cents (around 5p to 8p).

Bottom line before customers

Speaking about Apple's warning, the chief executive of iLoaded, Gary Morris, has slammed the news, explaining that Apple was looking at "the bottom line before its customers" and "holding its customers to ransom".

While it's unlikely that Apple will shut its store, considering its business model is based on consumers buying an iPod, logging into the store and buying music for it, it does show the power of the company in a music industry that is effectively in turmoil.

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avi

October 3rd 2008

6. Well I'm definitely an Apple fanboy! And I think they are absolutely right to shove it up the Music business. They are a shower! They endlessly threaten us over piracy, there are loads of daft stories like this trying to black Apple's name when the truth is that they'd had their day and they need to think of another way to persuade us to buy music. Prosecuting kids for downloading, stories like this, trying to kill Internet radio and everything they do amounts to own goals in my book.

I believe that CD sales are falling 20% per annum and it's getting worse and that Apple have 85% of the online music market, yet still only a tiny percentage of what's in the average iPod is a purchased download. The message is simple and Apple understand it. The price of music downloads is too high!

If it weren't for Apple I'd guess their business would be worse. Lower prices and new ideas are what's needed, not endless whining and threatening! I gather they regularly lobby the Government pointing out how much VAT is being lost because of illegal downloading.

Good on yer Apple! They've all but killed old fashioned hi fi and they'll dominate the home media market soon if they don't already. Don't knock it, instead hope it spurs others to better ideas and competition.

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lamboy

October 2nd 2008

5. This isnt about the DRM issue. This is about protecting revenue streams and who pays the price if the artists get a 66% pay hike.

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wavicle23

October 2nd 2008

4. iLoaded are spot on. This isn't about Apple defending the consumer because they never asked their consumers what they wanted. Apple are holding on to their DRM for dear life. They won't let anyone else license it from them. If they shut down iTunes then the iPod becomes redundant. How could anyone think that Apple have the consumer in mind over such a comment. Come on Apple let other legal sites offer your DRM - that way if you shut down Apple we don't lose out!

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lamboy

October 2nd 2008

3. Of course the correct answer is for the music publishers AND Apple to split the loss between them if the artists get a 66% raise, but that is never going to happen. So the consumer has to stump up the cash. Apple is the only ones blocking this, saying they dont want to raise prices. So how can Apple be the bad guy in this?

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megalaser

October 2nd 2008

2. I would say iloaded are right - don't feel sorry for Apple, the music publishers and artists are totally at their mercy and have to receive a tiny 9% no matter what song price Steve Jobs and co choose. Apple are undervaluing music, they have chosen these prices and the world has to follow? Also their threat to close iTunes store is ridiculous, they wouldn't be able to do it legally because the iPod cannot work with any other similar service, - they would have a huge class action lawsuit on their hands.

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lamboy

October 2nd 2008

1. This is utter nonsense! It is the Copyright Royalty Board that are set to rule on a requested 66% increase for sales of digital music (from 9 cents to 15 cents a track). Apple are trying to stop this happening because the rise will end up being paid by the consumer. In a nutshell, the music publishers are set to 'stick it to the consumer', Apple are fighting back on behalf of the consumer! Now I am no Apple fanboy but reporting 'slants' tend to do better when they are anti microsoft/Apple/sony, in this case the slant is in the wrong direction.

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