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iTunes DRM-Free Tracks Now Same Price As DRM Tracks
jawtheshark writes "Apple has made the decision to revise the pricing of Plus songs on the iTunes Music store. Whereas previously the DRM-less tracks were more expensive than the 'normal' option (at $1.29 vs. $0.99), DRM-less tracks bought via ITMS will now be priced on the same level as DRM'd tracks. 'Apple plans to expand iTunes Plus to include certain indie music labels starting Wednesday, October 17 (or sometime this week, at least) ... This expansion won't include all independent music labels just yet, although we're optimistic that more will be included in the future. While we have no information on whether the iTunes Plus songs are selling well, we assume that the decision to drop the price is a response to the Amazon MP3 store. Amazon sells individual tracks for between 89 and 99 apiece, all without any DRM restrictions. With that in mind, it's kind of hard for Apple to compete at $1.29.'"
It seems to me that DRM is digging it's own grave, thanks to the immense popularity of the iPod (I heard in the US like 80% market share).
The iPod uses DRM, but only Apple's DRM. And it can of course play unprotected songs.
Apple does not license it's DRM to other vendor: in effect becoming the only vendor selling DRM'ed songs to 80% of the market of digital music players. The rest of the players can fight of the left-overs.
Apple gets a lot of market power: the labels want to sell music, but only music with DRM. To reach the majority of the market, they must play together with Apple. And Apple has proven not to be very easy a business partner.
Thus the only way the music labels can tap into that 80% of the market, without going through Apple, is by selling non-DRM'ed songs. And there is a good reason for a music label to have multiple resellers for your product: then the resellers have to compete with each other to buy their music. Which likely gives rise to higher prices for the labels.
This way I see DRM having dug it's own grave: one DRM scheme became very popular, giving one player a very powerful virtual monopoly over online music sales. The label-mandated DRM now locks everyone in to that one player: Apple with their iTunes Music Store. And the only way to break this monopoly is to drop DRM, and that is exactly what is happening now.
And already we see the fruits of this development: iTunes forced to lower their prices, other stores offering flexible pricing options ('priced between 89 and 99 cents' - not much of a difference but there is flexibility), and certainly this will start opening the market for more online music resellers. This can not be a bad thing.
Getting even more off-topic: here in Hong Kong recently retail chain HMV started to sell tracks through ATM-style kiosks. Digital sales, but not online. These kiosks are in their retail outlets, offering buyers a huge collection (about half a million tracks or so; that requires quite a large brick 'n mortar store to house), and instant downloads to their digital music player. Again they use DRM: in this case Microsoft's Plays For Sure scheme. Now without DRM I'm sure HMV would have a much bigger market. I have no idea on the market share of Plays For Sure devices, though it's for sure less than half. So DRM free can instantly double one's market. If PFS devices are only 20% of the market (just a guess), they could increase their market five times just by dropping the DRM.
I doubt the record labels will ever agree that DRM limits their sales; confirming the R in DRM stands for Restrictions. Not Rights. Restricting not only what the user can do, but restricting your own market even more in the process.
Wouter.
Maybe I'm a bit naive but I thought it usually took time, work, and negotiation to reverse the practices of an entire industry. Apple did it first with EMI. EMI is sticking to their strategy hoping that they will survive and has started to offer it to Amazon. Universal is not happy with Apple right now so this is a bit of revenge on their part. Other than that, what is the major complaint here?
Information that is not hidden and can easily be removed. Information that reveals nothing more than the owner of the file. Information that has been embedded in every track Apple has sold (DRM or not) since the begining of iTunes. It's Apple's way of trying to track if someone buys a DRM free track and puts it on a P2P. When you buy anything (especially with a loyalty card), don't you think more information is gathered about you and sold to third parties?
Company 1 offers new product or service.
Company 2 offers more or better features than Company 1 months later.
Company 1 matches Company 2's offer a few months later.
In your scenario, you've called out Company 1 for failure to innovate. Wasn't Apple the first of the two to offer DRM free tracks? Didn't Apple convince EMI to do so? In my world, the two are just competing.
Well, there's spam egg sausage and spam, that's not got much spam in it.
If we look at the situation, we can see that there is a major problem with Amazon's service:
Step 1 - Universal wants higher prices, but Apple refuses.
Step 2 - Universal dumps Apple and goes to Amazon, and Amazon starts selling songs at prices lower than the iTunes Store.
Step 3 - ?
In Step 3, Universal needs to achieve the goals it set out with contract re-negotiations with Apple. The goals were higher prices, with a larger percentage going to Universal for sending over a digital copy of an album four years ago. (The artists, are, as you might imagine, quite irrelevant in their calculations).
So why are they selling tracks at $0.89? To drive people away from the iTunes Store, knock it off its pedestal as the dominant online music retailer, and then jack up the prices once that has occurred and there is a new major player on the block who is more...accommodating...to the wants of the major labels.
Am I suggesting that people abandon Amazon and start paying more of their hard-earned money to Apple? No. What I am suggesting, and what I have done, is to put a moratorium on my online music purchases until things settle down a bit, as I strongly believe Amazon is going to end up screwing us in the end. We have to keep in mind the only reason Universal went with Amazon was because Apple refused to let them dictate terms that would end up raising the price of online music to a point higher than physical CDs themselves.
It's ridiculous to think that these prices are going to last, and that when the "correction" comes, that it will be anything but drastic. Giving Amazon a great deal of business, and thus, the big labels more leverage over operations that have fought for the end users, is detrimental to online music retailing as a whole.
Let me reiterate, the problem is not that the music is being sold by a company other than Apple, but WHY that music is being sold by a company other than Apple at the prices currently asked.
i would hardly call AAC obscure. it has more device market penetration than WMA, that real defecation and OGG combined. even the zune plays AACs! ;)
Don't call me back. Give me a call back. Bye. So yeah. But bye our, well, but alright we are on a shirt this chill.