This is, to put it politely, nonsense.
Apple would be insane to switch off the Store now. It has invested far too much of its business in products and services that integrate with the Store to just suddenly pull the plug and go home.
The quote that has caused all the fuss is this one, submitted by iTunes vice president Eddy Cue to the Copyright Royalty Board last year:
“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.”
Let’s say that again: submitted by Eddy Cue last year. This is an old comment on an old issue and in no way reflects today’s reality: which is that Apple has invested a fortune in developing a line of products (iPhone, iPod) whose future is inextricably tied up with the Store. Switching it off would be little short of madness.
Of course Apple doesn’t want to run an unprofitable Store, that’s obvious. But what should also be obvious to all is that it isn’t going to suddenly have a tantrum and switch the whole thing off if royalties have to go up. The far more likely consequence is that you and I will have to pay a few pennies more for each song we buy.