Would Apple really close iTunes?

Word on the street - and whispered conversations in the places where London-based music industry executives hang out – is that Apple might very well have closed its heralded iTunes stores in protest if The Copyright Royalty Board decided to raise rates for the sale of digital music. Read: http://news.bbc.co.uk/1/hi/technology/7645537.stm

In the end, the Copyright Royalty Board decided not to change the rate (9 cents per song). It’s not to say that the fees that the likes of Apple, MySpace, Amazon, Rhapsody, LastFM and others aren't high. They are. However, I'm still left wondering if Apple would have followed through with its threat. Unlikely, I think. Would Apple really walk away from such a powerful global brand that: 1) reinvigorated the Apple brand; 2) was the springboard of success for the now iconic iPod and 3) the company had invested a staggering amount of money to advertise, market and promote? I wouldn't have thought so. The words 'nose', 'cut' and 'face' readily spring to mind.

This was pretty much a non-story. Undoubtedly it was a story that generated shivers of excitement and countless 'what if' scenarios.

The real story is why online music industry hasn't stepped up to the plate to adopt a revenue sharing model. This way, digital music sales would have more breathing room to establish itself; and artists as well as smaller independent labels and music publishers would be able to grow with the industry. Rather than focus on how much each publisher gets per track, the Copyright Royalty Board should try to maximize the total amount of fees that publishers will get. This is a logical and fair approach…which probably means it won’t happen – or at least not any time soon.

Who knows, perhaps this might happen in 5 years' time when the Copyright Royalty Board will once again convene to make a ruling.