There is another thorn in the flesh of Apple after the anti trust action against iTunes in Norway. The controversy this time is between Copyright Royalty Board (CRB), Digital Media Association (DMA) represented by Apple, National Music Publisher’s Association and song artists over the proposed hike of royalty fees paid to music artists.

The National Music Publisher’s Association earlier submitted a proposal to Copyright Royalty Board in Washington, DC to raise the royalty fees paid to music artists from 9 Cents per song to 15 cents. Digital Media Association including Apple (iTunes) finds this demand as a direct threat to take down online distributors. The ruling of Copyright Board will be heard on Thursday and there is a possibility that iTunes may shut down if the ruling comes out in favor of the demand.

We all know that for every song downloaded from iTunes, Apple collects 99 cent out of which 70 cents goes to the record distributor of the track. The record distributor in turn pays 9.1 cents to the song artist according to the existing online distribution system.

The record distributors are not in the mood to shell out the extra cents if the hike proposal is approved as CD sales have dropped by 20% in a year and the only means to recover their loss is from online downloads. Online digital retailers including Apple, on the other hand claims that the 29 cents they retain is just enough for maintaining the download platform with nothing retained as profit.

Apple has long asserted that it will rather shut down iTunes if the service is not profitable to the service provider. Raising the price of the songs is another impractical thing that Apple deems cannot be done at present. According to David Israelite, President of National Music Publisher’s Association, Apple wants songs to remain below the dollar mark to boost the sales of iPods. Apple will soon respond to this speculation if this is not true.

iTunes has become the number one music retailer in the US after beating Wal-Mart and Apple has sold more than 160 million iPods through the popularity of iTunes or vice versa. Shutting down of iTunes will be tragic for many music lovers. This is a stalemate situation and we will know the outcome coming Thursday.