Much to the happiness of those in the music industry, the United States Copyright Royalty Board (CRB) voted to keep the current online music royalty rates the same, without a fee increase. Each party involved got something beneficial out of the new deal, while ensuring each party also didn't get everything they wanted.
Each time a consumer purchases a song on a CD or downloads a music track online, musicians and record studios earn 9.1 percent.
If the CRB agreed upon a higher royalty rate, online retailers like Apple iTunes, Amazon and Rhapsody would have increased the price they sell their songs for. Worst case scenario, some of the retailers would have been forced to shut down, according to released reports issued over the past year.
In a letter from Apple to the CRB, reportedly had the following quote from Eddy Cue, who serves as Apple global vice president of iTunes:
"Apple has repeatedly made it clear that it is in this business to make money, and most likely would not continue to operate iTunes Store if it were no longer possible to do so profitably."
Digital music sales were never treated differently than CD sales, but CD sales have continued a downward spiral that doesn't have any signs of ending. The digital music business is now a multi-billion industry that grew 38 percent from 2006 to 2007, the RIAA said in previous statements.
There will be a royalty rate of 24 percent for each mobile phone ringtone sold, which is similar to the 10 percent industry wide revenue sharing for each $2.50 ringtone sold.
The Recording Industry Association of America (RIAA), SoundExchange, CRB and other organizations have been scrambling to try and finally adapt to the digital music age. The RIAA and company are working to try and agree upon a fair royalty rate with online radio broadcasters, who also face extinction if a fair royalty rate cannot be reached.
