The Federal Copyright Royalty Bureau ruled against music producers and the National Music Publishers' Association who were lobbying to get a 6 cents increase per digital track downloaded, going from 9.1 cents to 15 cents, a whopping 67 percent increase.
The formal request caused Apple to threaten to close its iTunes service in protest as a decision in favour of the NMPA "would significantly increase the likelihood of the store operating at a financial loss" according to the Cupertino-based company.
Observers say that Apple, which is expected to sell north of 5 billion songs this year alone, could easily have chosen to pass on the increase to the users instead.
After all, Apple spends next to nothing (literally) to sell digital sound tracks. They don't have to invest in pressing the CDs, in marketing them, in employing thousand of staffs and having high street stores across the planet.
So rather than helping the very group - the artists - who provide us with music, Apple used its mighty clout to silence them.
The NMPA represents the interests of the musicians, those who actually produce music and it is a shame that the CRB has decided to side with the labels, the RIAA and online stores like iTunes.
The rates will be frozen until 2013 at which date the royalty payment will be reviewed at which time, sales of digital music will have probably reached nearly USD 8 billion while CD sales will have dropped to around USD 3.56 billion.
The board also ruled that a whopping 24 cents will have to be paid to songwriters for each ringtone which is essentially a sample of an original song which costs more than the song itself; this might be a sure sign that the CRB is betting that ringtones will be a thing of the past soon.