Apple Threaten To Close iTunes Over Hightened Royalty Rates

Apple has threatened to close its iTunes music store over a request for a rise in royalty payments made to artists.

The Copyright Royalty Board is expected to decide today whether to instigate the 66% increase requested by The National Music Publishers' Association.

The organisation believes the rise, which would see the cost of a single track jump from 9 cents to 15 cents, is necessary because of the growing popularity of the digital music market.

The rise would have to be absorbed by either digital music stores like Apple, record labels or the consumer.

In documents which have only just emerged, Apple's Eddy Cue said the company would not consider “operating at a financial loss”.

"Apple has repeatedly made clear that it 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," he added.

The National Music Publishers' Association has argued for the rise on the ground that Apple make a substantial amount of money from their hardware. “We don't make a penny on the sale of an iPod,” they said.