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Apple iTunes Store goes '100% DRM-free' - allegedly

Schiller keynote makes $1.29 the new black

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Macworld Expo Take your pick - the iTunes Store is going 100 per cent DRM-free, or Apple is whacking 30 cents onto the price of each song and encouraging you to upgrade your whole iTunes library to iTunes Plus, at 30 cents (UK 20p) per song. Apple prefers the 100 per cent DRM-free line, naturally, but there's a price being paid to the record labels, and with "high-quality audio... that’s virtually indistinguishable from the original recording" defined as 256-Kbps AAC, there seems to be headroom for another bite in a year or two.

The iTunes Store is not going 100 per cent DRM-free exactly - it is offering 8 million of its 10 million songs in DRM-free iTunes Plus immediately, and another 2 million by the end of the quarter. This is thanks to an agreement with the four major music labels, Universal, Sony BMG, Warner Music Group, and EMI.

Alongside this, from April the basic (i.e. not 100 per cent DRM-free) iTunes pricing moves to three tiers, 69 cents, 99 cents and $1.29. According to Apple senior VP Phil Schiller, there will be more songs on sale at 69 cents than there will be at $1.29. He didn't get specific about how many would still be on sale at the current 99 cents price, but it seems reasonable to speculate that at least initially, most of the store will stay at 99 cents. The new sliding scale does however allow higher pricing for new releases and promos, and lower pricing for slower-moving back catalogue, which is a model the labels are familiar with.

So how much of that is going DRM-free and how much does it count as a price rise? That depends on what takes and what doesn't. The introduction of iTunes Plus clearly hasn't trashed the neighbourhood, and has been sufficiently interesting for the music labels to entice them to jump all the way in. The higher price tier for the basic service gives them a (presumably) substantially bigger cut from new releases, while the lower tier gives them the opportunity to exploit the long tail, should such a thing be possible.

Logically, if the store really is going to be offering all of its wares in the iTunes Plus format, then one would expect there to be a price above the $1.29 premium tier for the premium/iTunes Plus combo. Or do new releases stay DRM until they drop a price tier? We await enlightenment.

In addition, Apple announced that it is lifting the current restriction limiting iPhone iTunes purchases to Wi-Fi - these will now be possible over 3G as well. ®

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