Apple threatens to shut iTunes

Apple has threatened to shut down its iTunes Store following a row over plans to increase royalty payments to artists.

The US Copyright Royalty Board, the organisation which determines how much artists get paid for the sale of their songs, is expected to increase royalty payments from nine cents to 15 cents a track (5p to 8p), a 66 per cent rise.

iTunes vice president Eddy Cue said Apple might close its download store rather than raise its price, according to a statement he made to the Apple board last year.

Apple is expected to sell 2.4 billion songs this year, giving it an 85 per cent share of the digital music market.

The software giant pays 70 cents (about 40p) of every dollar it collects per song to the record companies responsible for each track.

Apple's threat to shut down its digital download service if the price hike goes ahead, as is expected, has drawn widespread criticism.

Gary Morris, the chief executive of iLoaded, a video download website, said Apple is putting "the bottom line before its customers".

Morris accused Apple of "holding its customers to ransom" by threatening to shut iTunes down.

This week it also emerged that Apple is facing a legal challenge in Norway to unlock the DRM (digital rights management) technology in iTunes.

www.apple.com/uk/itunes
www.iloaded.com