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Sunday, July 5, 
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Copyright board sets royalties for download sales, interactive streaming

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copyrightroyaltyboard.jpgAfter a great deal of loose talk this week suggesting that Apple Inc. [AAPL] might shut down its iTunes store if it had to pay higher royalty rates on sales of downloadable music, the Copyright Royalty Board returned a decision Thursday that will leave those rates unchanged. The CRB, a division of the U.S. Library of Congress's copyright office, had mulled multiple options that could have either raised or lowered per-song rate payments, or pegged them to a percentage of wholesale revenues.

Few seemed to believe that Apple would really shutter iTunes, but its bluff could have influenced the CRB's decision. The company, which sells music for little profit primarily to stimulate sales of its iPods and iPhones, has been rumored for months to be contemplating a monthly subscription service.

Separately, the CRB adopted the joint proposal of several industry groups that sets mechanical royalties for interactive streaming music at 10.5% of revenues, less performance royalties. As venture capitalist Jim Feuille of Crosslink Capital suggested to me last month, dealmaking in the sector could increase once the industry standardizes royalties and licensing for online music.

The CRB also set royalty rates for ringtones at 24 cents per song, confounding observers who wonder why a snippet of a song costs $2.99 while the whole song costs $0.99. Including this observer. -- Paul Bonanos

See Oct. 1 post from Tech Confidential concerning paid download royalties
See Sept. 23 post from Tech Confidential about interactive streaming royalties
For more, see Billboard and CNet


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