As Rumored, Apple Gives Record Labels Variable iTunes Pricing In Exchange For Ditching DRM

from the it's-something dept

As was rumored last night by Greg Sandoval at, it appears that Apple has worked out a deal with the major record labels (being confirmed as I type) where they will give up DRM (which is the direction they've been moving towards anyway) in exchange for variable pricing of music -- which they've been salivating over for years. This has been a major source of contention between Apple and the record labels. Steve Jobs has stood firmly by the $0.99/song price, while the record labels specifically wanted to be able to price hit songs at higher prices. The dropping of DRM is nice, but hardly that surprising, given that pretty much every other online download store has been going DRM free. This just puts the final nail in the coffin for music DRM. One nice tidbit: you'll apparently be able to upgrade your older DRM'd purchases to make them DRM free. That's a good (and slightly surprising) move.

As for the pricing, there's now three tiers: $0.69, $0.99 and $1.29. Hit new songs will go for the higher price while older, less popular songs will have their prices drop. The announcement isn't that surprising, but it is definitely a shift. What will be worth watching is how this impacts sales. It really may depend on how the record industry plays this. If (as seems likely) they put too many songs in that high priced level, it's going to lead to backlash. However, if they really embrace that lower price, it could encourage more folks to download music. I also wonder if it will push competing music download stores, such as to lower its prices even further as well.

While this definitely is a shift from the way iTunes has always worked, in the end, it's really not a huge shift. The industry was moving in this direction anyway, and killing off DRM was long overdue. The variable pricing is the type of thing that the big record labels will likely screw up, but in the long run is probably a good thing. The $0.99 per song fee has always been too high, and accepting variable pricing will eventually lead to those prices decreasing (not increasing, as the industry expects).

Filed Under: drm, itunes, variable pricing
Companies: apple

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  1. identicon
    His Shadow, 7 Jan 2009 @ 8:45pm

    Call a Waaambulance...

    winrova on Jan 7th, 2009 @ 4:17am I'm going to upset many Apple fans, but to hell with it. They deserve to be smacked anyway for being idiots.

    Yes, yes. What a rebel. Bashing Apple is such a rad move. It's not like people haven't been doing it for 25 years. That sound? That's my eyes rolling.

    But let's move past your insipid false bravado and see if you have something substantive to say...

    If anything, this move definitely pushed me further away from a company I didn't like to begin with.

    Nope. Nothing here but whining.

    To know they're in bed with the recording/music industry adds insult to injury.

    What injury, Whiner? The injury done to consumers by a company that provides seamless integration of audio and video purchases, downloads, transfer, viewing and listening across a varied product line?

    Oh, The Humanity!

    Even at $0.69/song, it's STILL TOO MUCH for a near $0 distributable valued good.

    Good Gravy you are one of Those People.

    Servers, network storage and access, software development, licensing agreements, advertising ...

    Guess what? All that stuff costs money.

    And what is all this carping about Apple anyway? Guess what, Putz? The prices and agreements and whether there is DRM or not are SET BY THE LABELS!

    While many (morons) out there feel a song is worth $0.99, it stuns me to believe they actually think this goes back to the artist.

    Don't be such a putz. The artists signed agreements, the Labels enforce them. Everyone gets their cut. It's not Apple's fault that the Labels are predatory and artists are easily manipulated.

    Apple made digital downloads easy and affordable and got the customer base large enough to make it worth the industries time to participate. From Day One they did not want DRM. It was forced on Apple by the labels to get content online. That's it, that's all. All your gosh-i'm-such-a-rebel Apple bashing is not only pathetic, but misplaced.

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