iTunes Store NOT shutting down today, tomorrow, or any time soon
1:39 am, October 1st, 2008, Giles Turnbull
There’s been a lot of hot air posted in recent hours about Apple’s apparent “threat” to pull the plug on the iTunes Music Store if it doesn’t get its way.
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.
Posted by Giles Turnbull in Music, News, iTunes | Comment on this article
Why do you assume they won’t? And if you haven’t noticed lately, iTunes is a lot more than tunes.
Brian, on October 1st, 2008 at 4:32 am
Yes, and the U.S. House of Representatives would be insane not to pass the Wall Street bail out proposal by a huge margin on the first vote, uh… oh… wait…
David Parks, on October 1st, 2008 at 5:42 am
Oh – go on. I hate my machine filling up with malware every time apple thinks I need it.
JaneT, on October 1st, 2008 at 7:15 am
Apple could partner with another provider like Amazon simply ‘renting’ the iTunes store. They could maintain control of the store’s presentation and upkeep but let Amazon deal with the inventory and pricing. Amazon would also bring it’s network of data storage services freeing Apple from that headache. This could also reduce Apple’s exposure to dips on the market and losses in music sales depending on the agreement with Amazon. It would, most likely, still result in higher prices. Though it may not because Amazon would then have nearly all the digital music sales allowing it to broker better deals with the music industry. There are other benefits as well: no DRM; no more S.J. fear in the music industry; and Amazon’s physical merchandise tie-ins like band shirts etc. Cheers.
Blaine Chaffin, on October 1st, 2008 at 8:57 am
Yes, I would love to have the U.S. bail us out of an economic crisis that they started in the first place….Never let those that make a classic and greatly forseeable mistake be the ones to find the solution…THAT is what is non-sense. Thank God for checks and balances, so we avoided that disaster. But on Itunes, couldn’t care one way or another and I am in the music business.
colin Braswell, on October 1st, 2008 at 11:53 am