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A Thursday ruling from the Copyright Royalty Board could force Apple to follow through on a threat to close down the iTunes Music Store. The Board, a three-judge panel, which will determine how much money creators are paid for their works, could follow through on a request from the publishers association to increase payments from 9 cents to 15 cents a track. Apple has said that move would make the ITMS unprofitable, and that it would be shut down rather than operate at a loss.

CNN has this statement from Eddy Cue Apple’s VP for iTunes:

“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,” Cue wrote. “Apple has repeatedly made it clear that it is in this business to make money, and most likely would not continue to operate [the iTunes music store] if it were no longer possible to do so profitably.”

To which I reply, yeeeeeeeah, sure. Apple is going to shut down a cornerstone of their new flagship product, the iPod. No, really, Mr. Cue, as Rory Gilmore would say, I toh-tully believe you.

What’s happening here, of course, is that Apple is getting caught between the RIAA and a hard place. According to the CNN article, Apple makes a slim profit on the ITMS, paying 70% of the 99 cents you spend to that organization, which pays the creators out of their cut. Apple is afraid that if the creators (that is, the people who make the music you’re buying) get more money, then that will come out of their 30%, rather than the RIAA paying more. Which would, of course, make sense, since it essentially costs the RIAA nothing at all to sell their music on iTunes. Apple, on the other hand, makes most of their sales on iPods, so they want to keep the cost of music low.

Of course, this isn’t about getting more money for the music creators. This is about Apple’s refusal to sell most songs for more than 99 cents, something the RIAA has been trying to get for quite some time. But since Apple commands so much of the online music sales world, no one’s had the authority to defy them yet. Drop out of iTunes, after all, and you drop out of 80% of online music sales.

Read on for more analysis of the problem, along with input from the other sides of the problem. How will all this play out? Stay tuned.

Read [CNNMoney.com]