Apple’s iTunes Store is a worldwide well-known success story which has written Apple all over it. But are we going to see Apple close the virtual store should the royalties increase? It seems that the Copyright Royalty Board (CRB) in Washington, D.C. will rule on a proposal from the National Music Publishers’ Association to raise royalties from 9 to 15 cents per track.

Eddy Cue, Apple‘s iTunes has told the CRB that Apple would rather terminate iTunes than see pricing go above 99 cents;

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.

From the 99 cents Apple collects, only 9.1 cents go to the artist out of the 70 cents the record labels get. Apple’s 29 cents a track is said to be used for maintenance and not profit. Neither Apple nor the record lapels want to pay the increased royalties.

With iTunes down, Apple will surely get another hit. People might not buy as many iPods and iPhones as before since there won’t be any music or application source left. Ultimately they won’t turn the service off. Or at least that’s how I see it.

What say you artists and developers?

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