Apple removes DRM on iTunes & adds variable pricing

At the recent MacWorld expo, Apple made some key announcements around iTunes that many of us have been anticipating for awhile. Namely, they are removing anticopying restrictions from iTunes, which will allow consumers to freely move the songs around between their PCs, mobile phones, and other digital devices. This is not a big surprise in that consumers have voiced anti-DRM sentiments for several years now. And Amazon's music service (closest rival to iTunes market share) launched its services as DRM-free over a year ago. In my view, enforcement of DRM with digital music services has been a key factor in slowing growth in the space -- and it's refreshing to see that after years of resistance to their detriment, the labels are finally allowing iTunes as the market leader to operate without those restrictions.

Another key announcement Apple made at MacWorld was that it will cooperate with the labels in offering pricing tiers for different songs on iTunes as follows: the majority of songs will drop to 69 cents starting in April, while the biggest hits and newest songs will retail for $1.29. Others that are somewhat popular will remain at 99 cents. I'm assuming the labels will dictate which songs fall into which categories, but the result should be an uptick in sales on iTunes as music lovers are further incented to dive deeper into the purchase of back catalog favorites. This move was long overdue, and is very welcome. Ironically this was something that the labels have requested of Apple for years (tiered pricing in CD sales is common practice at traditional retail), but Apple had resisted it.

Looks like Apple and the labels met halfway to achieve these two key wins for consumers. Both should benefit from increased sales and consumer satisfaction.