Apple can close iTunes?

Apple has said it may well close its online store iTunes. The reason - a possible increase in royalties from 9 to 15 cents for the composition, the decision on which is about to take the Copyright Royalty Board (CRB). In the case of increased payments to authors, trading music through iTunes can become unprofitable.

ITunes director Eddie Q said directly that he would close the store rather than raise the existing price level, equal to 99 cents per song. Considering the fact that Apple may lose WalMart or Amazon’s competition as the cost of songs increases, Que’s statements are quite logical.

The fact is that at the moment, selling the song on iTunes for 99 cents, Apple pays 70 cents to the record company, and 29 keeps it. And this is not a net profit. Eddie Q adds that "if the music store has to increase its expenses for any reason, including due to the growth of royalties, this will lead to significant financial losses that cannot be compensated for." Given that iTunes brings the company a minimum profit (at least, according to Apple), the additional costs can really reduce the profit of the store to zero.
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via news.yahoo.com