Wednesday, October 1, 2008

Apple's considering closing the iTunes store?!

http://news.yahoo.com/s/nf/20081001/tc_nf/62213;_ylt=AuX70l7FUwZxNwap.joSoCUjtBAF

According to this article, Apple may actually be considering closing the iTunes store. Threats from the Copyright Royalty Board (CRB) to raise the royalties artists get from digitial music from 9 cents to 15 cents is forcing Apple to consider closing the iTunes store. Being in the business school myself, I found this issue to be very interesting. If the CRB really does follow through and raise the royalties Apple is definately going to be in a difficult position. Raising the royalties will either force Apple to raise the amount of money consumers pay for music (which I'm sure will be met with plenty of controversy, anger, and decreased sales) or Apple will have to take a huge cut into their profits. The article says that Apple has stated that they are in business to make as much money as they can, and either way raising the royalties will decrease their profit. It raises the question of whether or not Apple should just leave the industry on a high note or create some new innovative product that will help them overcome the profit loss they will encounter. Another interesting point is that now that Apple has made it clear that they are considering closing the iTunes store, does the CRB see Apple as too big of an influential company in the music industry to go against Apple's wishes. I'm very curious as to see who will win this battle!

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