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Apple To Grant All Labels DRM-Free Distribution
SexCaptain writes "MacRumors.com reveals a letter circulated by Apple to all producers of content for the iTunes Store, announcing that from May onward they can sell their music at higher quality and free of DRM. Hopefully this opens the doors for labels like Netwerk. This is a big step in the right direction, although it's unclear exactly what Apple means by 'higher quality,' and there is no mention of price changes. (Apple charges $0.30 more per song for DRM-free content from EMI and encodes it at 256K.) Quoting from the letter: 'Many of you have reached out to iTunes to find out how you can make your songs available higher quality and DRM-free," Apple wrote in the communication. "Starting next month, iTunes will begin offering higher-quality, DRM-free music and DRM-free music videos to all customers."
Of course, at 1.30 per song, iTunes' DRM-free AAC cost about 6 times as much as eMusic DRM-free MP3, but for all those people looking for DRM-free top-40-type music, dream come true, eh? (how big is that overlap, anyway?)
It seems pretty clear to me-- they're offering the same pricing scheme that they've announced with EMI. They will continue to sell 128 kbps DRM-wrapped AACs for $0.99, but will additionally offer 256kbps DRM-free AACs for $1.29. Anyone familiar with Apple's tactics will tell you that they'll want to keep it simple. They'll offer the same pricing for the same product across the board.
I'd guess that this is all transitional anyway. Apple will continue to try to pressure labels to drop prices and remove DRM on everything. In the mean time, this is a step in the right direction.
Agreed. It's now significantly more expensive to buy music from Apple compared to Wal-mart. This is progress?
No, letting the labels set their own prices WON'T result in lower prices. Here major label logic for you:
Popular Tracks: Need to cost more to cover the demand for them
Unpopular: Need to cost more to cover the cost of making them available.
If anything 99 cents will be the 'base' cost and things will just go up for there.
It would also allow smaller labels labels and independent musicians to compete by leveraging their lower overheads--one can sell for less when a album was self-produced in a week with no advance and no A&R guys to feed.
This is exactly why I'd expect the RIAA to pull out of iTunes if they allow this. No matter what, they don't want an efficient market - not when they're selling artificial scarcity.
It's interesting to see Apple as the potentate with the ability to change the music industry with small changes in policy. I think they're doing a good job as benovolent dictator, but there's some deeper meaning, I'm sure, to the fact that iTunes is only 5 years old and we're talking about things this way. The power of the Internet to change markets, demonstrated, perhaps.
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Agreed. It's now significantly more expensive to buy music from Apple compared to Wal-mart. This is progress?
It's also considerably more convenient. And not that much more expensive. Apple doesn't censor the music or movies they carry. You can buy one song at a time or the entire album. And there's no wasteful packaging.
Yeah, I'd call that progress.
Yes, its amazing if you steal something how cheaply you can then sell it for.
Less flippantly: an item is worth what the market will pay for it.
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When Jobs came out with his "Thoughts on Music", I made all kinds of cynical comments saying that he was being disingenious for this or that reason. After all, Job's in incredibly successful and people all over the world laud him and his company's products, so he NEEDS to be brought down a notch.
Well now he's making me look like an ass.
And the answer is, they don't want to be in the music business, at least no more than they have to be. The only reason they are curently is because the music business provides content for their hardware business, which is where the real money is made. The iTunes Store is effectively a loss-leader to sell iPods. Jobs has said as much already.
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I'll give them $2.00 a song if they will give up on this compressed stuff and sell me lossless. I'd like to have the same music that comes on the real CD. That way I can compare a checksum with a "global public" value, and make sure they haven't watermarked the song. They could even go to $3.00 a song for people who are aficionados and release the 24 bit stuff.
So we have...
$0.99 = DRM'ed AAC at 128kbps
$1.30 = Non-DRM'ed AAC at 256kbps
$2.00 = Non-DRM'ed, lossless.
$3.00 = Non-DRM'ed, 96KHz-24bit per Channel.
Still dreaming.
Yay for Apple fan logic.
Generally I would expect that not needing packaging, delivery trucks, shelf space, etc, would result in the end product being cheaper due to the lack of need to pay for all that stuff... but no, somehow delivering less is a "feature" that makes sense to pay extra money for.
Don't get me wrong, I don't care much for the packaging either, but calling it progress to pay extra for the lack of something is quite bizarre.
Their entire catalog [zunior.com] is in non-DRM format and they have been doing it this way for a lot longer than Apple.
Your argument is significantly undermined by the fact that their entire catalog consists of artists and labels I've never heard of before in my life.
They could price their albums at $1.25 apiece, and most people still wouldn't be interested.
I'm very skeptical that it will be OSX in anything but name, or possibly kernel. But almost any application that is suitable for a phone would not be very usable on a desktop and vice versa. Video games have a much higher threshold on a desktop. Excel would be a travesty on a phone. Even the VNC version that I have on my desktop would positively suck on a phone. Even phone-centered apps like Address Book or iCal are not suited to the tiny screen on the iPhone.
Even if the iPhone worked perfectly with all OSX applications, it would be but one example in an ocean of counter-examples. I have never seen a Palm or WindowsMobile application that is as functional as it's desktop equivalent.
I'm not saying that DRM doesn't restrict software - clearly it does (as in your vmware example). I'm just saying that we, as a society, seem to hold software to a different standard than music, and I was simply pontificating on why I thought that was the case.
I think that video is somewhere in between the two - perhaps when it takes less than 2 hours to encode a H264 movie people will start to care more. Right now, ripping a CD takes about 2 minutes and it's pretty bulletproof.
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Yay for a complete lack of understanding of economics.
The price Apple charges has nothing to do with the cost of delivering it. It is simply the highest price that users will pay, such that Apple maximises their profits.
You are only looking at a fraction of the actual costs. How do you know what Apple's costs are, vs. the costs incurred by a physical distribution company? The costs are not just for the physical media and distribution, or the network bandwidth, iTMS development and hosting costs, but also the negotiated per-title royalties that must be paid. The labels get their cut, and that's probably the most expensive component of the price.
And even after all that, sure, Apple's costs may be lower. But Apple's prices are apparently higher by your measure, and I think that's why you're complaining.
You see, there's this funny idea called 'Capitalism'. Capitalism pretty much means "if you want to sell a product at whatever price you want to sell it, go for it. If you make money, congratulations. If you lose money, tough." The corollary to that is "if you want something and are willing to pay the asked-for price, you can buy it. If you are unwilling to pay that price, you can try to negotiate a new lower price, shop elsewhere, or go without."
So if you think a DRM-free song is worth only $0.25, why not write to Apple and ask them to sell you that song for $0.25? If they're unwilling to negotiate with you, then you are free to go to another source and pay their asking price. Otherwise, contact the record labels yourself and start a music distribution business of your own, set your prices at $0.25, and make lots of money. Let us know how that works out for you.
John
And don't forget that by buying off iTunes you're also saving the planet. Just think of all those dirty emissions you avoided creating by staying at home instead of driving. Add to that the emissions saved by by using 1 less CDs worth of plastic, packaging and transport to the store of your choice.
You just got greener
Not to be a conspiracy theorist or anything, but I wonder about this. That is Jobs' pitch to the record companies: "We're not your competition, we just want to sell iPods." But is it really true? Jobs thinks long-term. Maybe he's just lying low, trying not to spook his prey until it's too late. With iTunes becoming huge, what young musician wouldn't be tempted to sign up with iTunes as a label? Particularly if, instead of the artists getting a small slice of the record companies' cut of an iTunes sale, they got most or all of it? Wouldn't that increase the artists' income from digital sales by something like 400%?
The major labels would excrete bricks if this happened, but if iTunes gets much larger, it may be inevitable. At that point Jobs will have the major record companies over a barrel, and could make them obsolete while getting cheers from everyone else by vastly increasing what musicians make for digital sales and giving the fans what they want.
Imagine the PR coup that would be. I see it as a "One more thing..." item at a future MacWorld Expo keynote.
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