iTunes Goes DRM Free and Add New Prices

January 6th, 2009 at 12:00 am

itunes logo

Macworld today featured the keynote speech from Apple.  As usual Apple had a lot of things to report regarding the progress of their company, however this year there isn’t a big launch like the iPhone.  Most of the new products are software and some expensive laptops. Some changes on iTunes however will be affecting the entire world and that we consider to be their biggest announcement of the keynote.

Major changes to expect on iTunes are, all songs DRM-free, downloads over 3G for iPhone users, new three tiered pricing scheme.

Beginning today, all four major music labels—Universal Music Group, Sony BMG, Warner Music Group and EMI, along with thousands of independent labels, are now offering their music in iTunes Plus, Apple’s DRM-free format with higher-quality 256 kbps AAC encoding for audio quality virtually indistinguishable from the original recordings.

More importantly, beginning April, there will be a three tiered pricing scheme depending on what music labels charge.  Songs will be available for $0.69, $0.99 and $1.29.  “We are thrilled to be able to offer our iTunes customers DRM-free iTunes Plus songs in high quality audio and our iPhone 3G customers the ability to download music from iTunes anytime, anywhere over their 3G network at the same price as downloading to your computer or via Wi-Fi,” said Steve Jobs, Apple’s CEO. “And in April, based on what the music labels charge Apple, songs on iTunes will be available at one of three price points—69 cents, 99 cents and $1.29—with many more songs priced at 69 cents than $1.29.”

So far itunes has sold 6 billion songs with currently 8 million songs in DRM-free format.  

The three tiered pricing system does seem like a fair bet for Apple however it may also be a speed bump.  Since they say that more songs are priced at 69 cents, why not then just price everything at 99 cents and let the first and last tiers average out.  I think it will all just come to the same earnings.