This is terrible. Those evil artists want Apple to make only double the revenue that they, the actual creators, do. But how can Apple survive on only twice the revenue, while doing absolutely nothing creative, in fact virtually nothing at all, except running a server? The artists are just exploiting Apple, who obviously deserves much more money than the musicians do. Anyone can turn out quality music, but it takes talent, energy, and enormous amounts of money to run a server. Consider ~$0.25 per 2-MB highly-compressed DRM'd track. That's 12.5 cents per megabyte. Who could POSSIBLY profit at that rate? Everyone knows it costs server operators at least a dollar per downstream byte.

The important thing to remember here is that Apple was first. They created the glorious iPod, finally giving musicians a venue; without Apple the artists would be nothing and indeed before Apple there was no music except for that pipe-organ and Gregorian chant stuff. In fact the iPod does not even need the artist because it is a self-sufficient device with cool buttons and a nifty little screen that people buy in droves because it is so awesome and only later think, "Why, I wonder if this thing plays MUSIC? You know, that stuff that comes from SERVERS and is only vaguely related to ARTISTS"

I'm glad ludi sees through the smokescreen and is the voice of intelligence (or maybe intelligiousity) on every issue.

LOL! thats the dumbest title i have ever seen. if apple shuts down iTunes, its iCrap sales will plummet faster than its stock...or vice versa.

Meh. iTunes and the major record labels can all take a collective flying leap, as far as I'm concerned.

yea I just saw this announcement on afterdawn.com about 15 minutes ago.

To me it sounds like Apple is a little boy threatening to drown himself if his mom forces him to take a bath.

The fact remains that nothing will change until people stop buying music.

Its really that simple. Stop buying music from any source other than the artist directly.

I have not bought a song from the recording industry in 10 years. I have my (non-illegal) ways to find music I like without paying for it.

If we stop buying music long enough, the music industry will collapse and go back to the control of the artists.

Sure.. most musical artists will suffer while this happens, but its not like we can accidentally 'destroy' music forever...

Bluff. Apple wouldn't shut down iTunes, it along with iPod is responsible for a lot of Apple's resurgence. I also find it hard to believe that their margins are so thin that a 5% change would make it unprofitable.

They blinked
http://news.cnet.com/8301-1023_3-10056852-93.html

(the board, not Apple or the record companies)

So if you're an independent artist who puts up their music on iTunes using a service like TuneCore, does that mean you get to keep the full ~70% song revenue? Or does Apple take a larger chunk?

Soo...what will happen to Apple's DRM servers if they do (hypothetically) shut down iTunes?

Since Fairplay does not rely on server authentication for playback, existing devices should still work, right, but what about transferring rights to other machines in the future?

Do the math:

Apple sells iTunes track for $0.99.

According to the article, 70% of revenue goes to record companies. Therefore, Apple keeps $0.29, and the record company takes $0.70.

Of that $0.70, the record company currently gives $0.09 to the artist and holds $0.61.

If the rate is increased to $0.15 for the artist, the record company is saying that it will still expect $0.61, therefore Apple must either charge $1.04 (and break the magic buck), or keep just $0.24, lowering the iTunes operating revenue by 21%, or somewhere in between.

Apple cannot raise the price even one penny without breaking the buck, which their research probably says would lower sales by some tangible amount, so they're looking at taking a 21% hit to continue business as usual, including running the actual content servers and software development, with the record companies continuing to take the lion's share just for holding the copyright and engaging in a little paperwork to route the money to the artist.

Yeah, I'd have a problem with that, too.

Hehehehehe. Suuuuuuure they will.

Can't blame 'em for playing hardball on these royalties, though. They're stifling.

I always thought itunes was rediculous... people should just buy off amazon if they really want this stupid service. Apple is afraid that people wont buy as many songs at $1.04 a song... the record labels are money hungry industry corporates who don't care about the difficulty people suffer... and the artists are mostly stuck up people who always believe they are worth more than what they have. Honestly nobody in this story deserves any sympathy... consumers included... its a bad system and people should just use alternative means to find their musical entertainment (cd's, radio, streaming music, tv, etc...).

So hopefully itunes will shut down, publishers will lose money and artists will have a harder time signing contracts because they want to much money.

What ever happened to letting artists set their own prices, and having in chain down thelinehowever each individual sees fit?

$0.99 per song was ever a law passed down by me, or any other god. It's a simple marketting choice by iTunes. No one ever said it had to be that way. If an artist wants more money for his song, and the label wants to pass the cost on, iTunes is welcome to pass it on yet again. Welcome to the economy. It's not difficult.

Let the artist choose any number of cents, from 0 to 1'000'000. I think that's called a free market.

The whole idea behind $.99 digital distribution is volume. Artists should do two things to ensure their revenue streams:

(1) Make better music so that more people will buy their songs in greater volume

(2) Negotiate better contracts with the recording companies that would entitle them to more revenue per song, if they are disappointed with the number of digital songs iTunes is able to sell.

The two go hand in hand, don't they? If you don't make good music, demand won't be high and you will make less. Make good music and demand will be high and so will your revenue.

Putting Apple and the consumer in the spotlight is a red herring, imo. This is a matter between the recording companies and the artists that contract with them.

in other news: iTunes smells like Benzene.

I'd love nothing more than for them to go through with that. While anyone can get their work put on iTunes, it amounts to nothing more than a new and more efficient method for record labels to abuse hard working musicians with, and further dumbs down music into a disposable product.

Why find artists with worthwhile albums to release? Have a single song from our newest manufactured idiot! Here today, gone tomorrow, and we'll have another one ready by the time this one has run its course!

Of course, then the problem is that the record labels would probably take it upon themselves to make their own service. And judging by the fact that their recent "change of heart" and grandiose plans to distribute music for free have been so quickly forgotten, its obvious where their intentions still lie.

Does anyone know of a specific cost breakdown for iTunes music? (Including the differences between the non-DRM'd files)