The Copyright Royalty Board (CRB) in Washington ruled Thursday that music publishers and artists are entitled to a royalty payment of just more than nine cents for each track sold online. In addition, the CRB established a royalty rate of 24 cents for content used as ringtones.
The ruling is the first to formally establish a rate for digital downloads. Until now, online stores such as Apple’s iTunes Store had been paying the same rate paid to artists for CD tracks. The new ruling will remain in place until 2012, bringing a level of predictability to the online music industry.
The CRB’s decision also brings to a close the brief but entertaining drama sparked by Apple’s comments that it might shutter the iTunes Store rather than swallow a royalty rate increase. The implicit threat had received a lot of attention recently, but was derided by some analysts, who noted the Web site’s strong revenues and integral role in promoting Apple hardware.
Roundup of Reactions
Although copyright holders had been asking the CRB to increase digital-music royalties from nine cents to 15 cents, the decision to extend CD royalty rates to online tracks received support from both sides of the issue.
Apple had the least to say, offering only a brief statement that the company is “pleased with the CRB’s decision to keep royalty rates stable.” However, Jonathan Potter, executive director of the Digital Media Association — a trade group whose members include iTunes, Amazon.com, Best Buy, and other online music stores — offered a broader assessment.
“During this challenging time for the music industry and digital stores and services,” Potter said, “we are pleased with the CRB’s decision to keep royalty rates stable for the next five years. Keeping rates where they are will help digital services and retailers continue to innovate and grow for the…