Royalty hike: what would Bono say?

In a move that flies in the face of all known financial logic, the Copyright Royalty Board will meet today to discuss the proposal that their cut of digital music sales in America should increase from 9 cents to 15 cents per track. The increase was tabled by the National Music Publisher’s Association who, having not heard of the rule we call “economies of scale”, decided that as sales of digital music downloads in the United States increased by 46% last year they clearly deserved to bump up the price.

The move has angered Apple who, in staunch refusal to pass on the increase to consumers or absorb the deficit themselves, have previously issued a thinly veiled threat to close their online iTunes Store in the face of any price increase. Having seen sales of traditional media in the states drop by 20% last year, the industry expects that the record companies will also refuse to absorb the increase.

In a statement that further illustrates how removed from reality they are, NMPA Chief Fucktard David “Ohhhh, oh-oh, oh oh-oh-ohhhhh” Israelite justified the proposed increase by stating “Apple may want to sell songs cheaply to sell iPods. We don’t make a penny on the sale of an iPod.” Clearly Mr. Israelite is unaware that in the history of recorded entertainment media no company which does not manufacture playback hardware itself has ever received a penny from the sale of said hardware.

In an earlier dispute over royalty proposals Eddy Cue, Apple’s Vice President for iTunes, made a statement in April 2007 to the Library of Congress making it clear that Apple was “in this business to make money, and would most likely not continue to operate iTS if it were no longer possible to do so profitably”. Apple are believed to pay 70% of it’s iTunes income to the record companies who are then responsible for passing on a share to the artists.

iTunes’ share of the digital music download market currently stands at 85%.