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Apple Talks Tough, Threatens To Close iTunes If Royalty Rate Rises

October 1, 2008 2:15 PM ET

A ruling by the Copyright Royalty Board tomorrow could spell trouble for Apple's iTunes. The National Music Publisher's Association has asked for a 66 percent increase on the royalty rate paid out on the sales of digital music — from nine cents per track to 15 cents. In a statement submitted to the board last year, Apple warned that they may shutter digital-music service iTunes if the request was approved. Apple already pays 70 cents of each song purchase to the record companies, who aren't willing to pay for the increase themselves. Since they would essentially be operating the service at a loss, Apple would rather shut the store down than raise their prices beyond 99 cents per track. While it's hard to fathom that Apple would close the world's most successful digital music store — possibly cutting into the sales of iPods and iPhones, where they make their real money — the fee hike would definitely have some adverse effects, most likely on the consumers' wallets.

Related Stories:
Wal-Mart Download Store Stops Using DRM
AC/DC Snub iTunes
MySpace Music Launches

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Song Stories

“Don't Dream It's Over”

Crowded House | 1986

Early in the sessions for Crowded House's debut album, the band and producer Mitchell Froom were still feeling each other out, and at one point Froom substituted session musicians for the band's Paul Hester and Nick Seymour. "At the time it was a quite threatening thing," Neil Finn told Rolling Stone. "The next day we recorded 'Don't Dream It's Over,' and it had a particularly sad groove to it — I think because Paul and Nick had faced their own mortality." As for the song itself, "It was just about on the one hand feeling kind of lost, and on the other hand sort of urging myself on — don't dream it's over," Finn explained.

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