Summary
Two big moves announced by Apple at MacWorld regarding iTunes: a new pricing strategy to begin in April, and that the company was dropping digital rights management (DRM) from the music sold on iTunes.
Analysis
Apple's decision to offer a new pricing strategy is welcome news by the record labels, who are trying everything to boost revenues. CD sales were down dramatically again in 2007, and the sale of online music was much slower in 2008 than in 2007. Three new price levels were announced, ranging from .69 to .99 to $1.29, but no detail on what will be offered at what price.
But Apple's decision to remove the digital rights management copy protection from its library is much bigger news, and allows for music purchased on iTunes to be played on other players for the first time. Also, the change will allow iPhone users to now download directly from iTunes, rather than having to connect their phone to a computer.
Steve Jobs first proposed eliminating DRM two years ago, and it was initially met with skepticism. It's taken time to work this out, but it should be a catalyst for more people buying music legally with the ability to interchange on various playback technologies and platforms.
Hopefully this is good news and a win-winfor all concerned: Apple, the big music labels (Sony, Universal, Warner and EMI) and consumers. Although I'm anxious to see the price structure that will debut later in the spring.
One annoying part of the announcement--Apple will let users strip their current iTunes library of DRM for .30 a song, or 30% of the price of an entire CD/album purchased via iTunes. I'm not sure how many current users will jump on that deal.
