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Apple iTunes Music Store Going DRM-Free |
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Music Industry News -
Digital Sales (Online Stores)
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Written by Marin Perez (Information Week)
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Tuesday, 06 January 2009 00:00 |
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 For the last six years, Apple has sold the vast majority of its music through iTunes for 99 cents with DRM. It has been a winning strategy so far, as Apple's iPods hold nearly 75% of the digital music market, and the iTunes store has become the largest seller of music in the United States.
But the music labels have bristled at the single price point, and some consumers felt the DRM was too restrictive. This potentially opened the door for digital music competitors like Amazon (NSDQ: AMZN).com, which sells DRM-free music for multiple prices. But Schiller said starting today users can buy 8 million tracks without DRM. This DRM-free music comes from the four major labels, and multiple independent labels. By the end of the quarter, Apple said it will offer its whole catalog of music, 10 million tracks, for sale without DRM. The DRM-free music will be in the iTunes Plus format, which is a higher-quality 256 Kbps AAC encoding. Users have the option of upgrading their current library to the higher-quality, DRM-free format for 30 cents a song.  The company will also introduce variable pricing for its music starting in April, with price points of 69 cents, 99 cents, and $1.29. This has been a point of contention for many music companies that wanted to be able to charge different prices depending on the demand of the song. Schiller said "most" of the music companies are planning to offer songs at the lowest price point, and all three price points will be DRM free.
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