Major record labels to Apple: You can ditch DRM completely in return for higher prices.
That’s right, the major labels have finally got their way as, come this April, Apple’s iTunes will introduce “variable pricing”, with tracks costing either 69 cents, 99 cents or $1.29, depending on how popular they are likely to be. In return, Apple gets to move all 10 million tracks in its iTunes store over to a DRM-free format — 256 kbps AAC — including those from Universal Music Group, Sony BMG, Warner Music Group and EMI, along with thousands of independent labels, something that’s been partially lacking compared to rival stores such as Amazon MP3.
While Apple asserts that the majority of music sold will be at the new lower price of 69 cents (currently all tracks retail at a unified price of 99 cents), at the labels’ request, the most sort after songs will be priced at the higher $1.29. This is the crucial part, since if you follow the Long Tail of digital music downloads, naturally a significant amount of activity — think new releases from established and well backed artists — happens at the fat not thin end of the ‘tail’, where tracks will likely be priced highest.
As if to add insult to injury, Apple will offer iTunes customers “a simple, one-click option to easily upgrade their entire library of previously purchased songs to the higher quality DRM-free iTunes Plus format for just 30 cents per song or 30 percent of the album price.” That’s right, those music fans who overpaid for the price of tracks crippled with DRM in the first place can pay once again to have those restrictions removed!
In other iTunes news, it looks like Apple has managed to win one battle, this time with its mobile carrier partners as over-the-air iTunes downloads are on their way. “iPhone 3G users can now preview and purchase the entire iTunes Store music catalog on their iPhone 3G over their 3G network, just as they do with Wi-Fi today, for the same price…”. Or perhaps, like the major labels, the carriers are getting a kick back in return.