Apple Threatening "Scorched Earth" iTunes in the US and Norway?
Looks like Apple might be shutting down iTunes in the US and Norway. At least that's what VP of Internet Services (iTunes, Mobile Me, App Store), Eddy Cue says (via Macrumors):
"If the [iTunes music store] was forced to absorb any increase in the ... royalty rate, the result would be to significantly increase the likelihood of the store operating at a financial loss - which is no alternative at all. Apple has repeatedly made it clear that it is in this business to make money, and most likely would not continue to operate [the iTunes music store] if it were no longer possible to do so profitably."
What's the deal'yo? In two separate, but equally perplexing bits of news, the US Government is thinking of dumping an extra $0.15 surcharge (going to copyright holders) onto digital downloads, which would result in either consumers paying $1.14 a track for iTunes music, or Apple eating the $0.15 itself.
Since Apple already gives the record labels $0.70 per download, and out of the remaining $0.30, pays all the bandwidth, storage, infrastructure, credit card and other transactional feeds, administration, etc., cutting that margin in half is not realistic for a for-profit company (can you say shareholder lawsuit?)
Hey, here's an idea, why not take that from the record label's cut? They've made a business out of negating artists rights (remember, they went to court to get ringtones declared derivative works, so they don't have to pay artists -- but still charge consumers ridiculous, pure profit, premiums for them!), so it seems only fair restitution should come from their end (provided the artist still holds the copyright...)
Meanwhile, Norway wants Apple to open Fairplay DRM. While Apple has publicly stated they themselves want to rid music of DRM, the record labels won't give them DRM-free music (preferring to use it to bolster competitors like Amazon and Naptser), so how about Norway go have a word with the Big 4? I'm sure everyone else would love to be rid of that short-sighted bit of un-usability. Then go swing the mystic hammer at Hollywood and get us DRM free TV and movies while they're at it. As we all know, DRM doesn't stop real pirates, it just makes it harder for real users to manage.
What do you think? Is Apple rightly on the hook? Or is it time pressure was placed where it really belongs, on the Big Media companies?
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