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.'"

Hard, but not impossible

[MobyDisk]

With that in mind, it's kind of hard for Apple to compete at $1.29

Most iPod owners aren't going to bother downloading from Amazon and importing into iTunes. So Apple still could compete, but only by relying on users who don't know or care enough to switch to the alternative. Even so, this is still a good move.

Now I have to figure out how to tell the DRM-tunes from the non-DRM tunes. It was easy when there was a price difference.

Competition is good

[UnknowingFool]

Maybe Amazon had something to do with it, but Amazon was only trying to compete with iTunes Store. Personally I think consumers win there is competition like this.

More important (to me at least)

[Trelane]

Amazon and Magnatune work on Linux. Or just about any OS, for that matter. And they work with any MP3 player ('cause they're, you know, MP3s).

Boiling RIAA

[TaoPhoenix]

Brilliant.

Announce the "intermediate" step of "no DRM, we'll pacify you by raising the price. X months later we'll do what we really wanted to."

Re:Nice

[BlowHole666]

Yes competition is good. I has caused apple to lower it's price to keep a few of it's customers. It also has caused some music labels to rethink how they sell music. (I know one of them is selling music online with non-DRM).

Radiohead album a factor as well?

[dj42]

I'm curious if Radiohead's Name-Your-Price album prompted the announcement, Apple thinking they could catch a bit of positive press while the anti-RIAA/DRM sentiments are flowing.

Who knows.

DRM digging it's own grave

[wvmarle]

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.

Let's State the Blazingly Obvious

[DannyO152]

So the dinosaurs bellow in the night, pull their tracks, and now look at the shelf space for the independents: smaller, hungrier people who see opportunity in the new distribution technologies. The dinosaurs seem to have forgetten the door they left open during the three years they didn't get MTV.

If I were Apple, I'd talk to the independents and help them start some internet radio channels and provide sponsorships so the new channels can afford the air talent and the short-term loan to Sound Exchange (who will be collecting all internet recording performance fees and then giving out to the record companies who hold the copyrights on the recordings.) People only buy what they hear and can find.

Re:Hard, but not impossible

[aliquis]

Shouldn't the naming be the other way around? Normally companies brags about how the device supports extra security features as if that was a good thing ;D

Re:Huh

[BlowHole666]

Yes but this does not make up for the STUPID user. Most people on Slashdot know what DRM is. The 15 year old girl who wants her hip-hop for her pink ipod will not. I think itunes needs a big ass message that pops up explaining what DRM is and have a "Yes I Want This" button and a "No Thanks" button and let people pick that way.

Switch the naming around

[stewbacca]

Seems like iTunes PLUS should now be called iTunes, and the remaining stupid studios that still demand DRM should be put in iTunes PLUS. Afterall, you are getting MORE with a DRM laden file. They should also charge $1.29 for the extra stuff (drm) you get in those songs.

Re:I realize all of this will continue to evolve..

[UnknowingFool]

- still has only EMI (and the independents) at this new rate (compared to Amazon, which also has Universal)

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?

- still embeds buyer information inside the files

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?

- chose to react rather than innovate
It's the fourth bullet point that dismays me the most.

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.

Re:More important (to me at least)

[Trelane]

At the moment, linux users can only get single tracks, which is more costly than the whole album.

Good point. I'd not realized the price discrepancy.

Also, apparently you cannot re-download without the magic software. (can't find my source for this anymore. It was either Ars Technica or a Planet that I read.)

Regardless, at least it works to some degree, in contrast to iTunes. And Magnatune Just Works Better. :)

Regarding US-only: I did find this [venturecake.com].

it proves DRM is worthless

[Kartoffel]

Since DRM and DRM-free tracks cost the same, it proves that DRM is worthless!

song_value + DRM_value = song_value
              DRM_value = song_value - song_value
              DRM_value = 0

Re:Hardly easier

[Anonymous Coward]

>How is it easier to put songs on your non-iPod from the Amazon store when they DON'T CARRY THE SONGS???

Funny, people griped about iTunes for the same reason when it started... but it got better. Amazon's service is relatively new. It might just get better with time, too. Imagine that.

Stop whining, please? It's tiresome.

The Complete Interpretation of the Events

[TrekkieGod]

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.

It's ridiculous to think that these prices are not going to fall more, maybe even to a point that I will find reasonable. Universal essentially lost the war, and now they're just trying to pick up the pieces. This is how I interpreted the whole series of events:

1. Universal and others start telling Apple that they want higher prices
2. Apple realizes that the iTunes store helps sell iPods, so they want to keep the prices reasonable. In addition, since the iPod has a huge market share, they're fairly comfortable in just saying 'no'. Plus, it's good publicity for Apple, because everyone sees them as standing up against the big bad evil labels.
3. Labels decide to play that game to get the higher prices. They now want "tiered" pricing. They spin it by saying that some songs are worth more than others, so why should people have to pay $0.99 when they could be paying less for the less popular songs? In truth, most songs will actually cost more and, strangely enough, the public who usually buys this sort of BS didn't fall for it.
4. Universal tries to find other ways of making the extra money. Gets into a sweet deal with Microsoft for royalties on every Zune sold. Then tries to use that as leverage and claims Apple should do the same.
5. Nobody buys the Zune.
6. Universal tries the tiered pricing again. Threatens to not renew their contract if they don't get it.
7. Apple reminds them of the huge iPod market share
8. Universal and other labels who want a better deal start complaining that the iPod's DRM is closed, preventing people from buying music at other stores and playing them on the iPod. If they can bypass the iTunes music store, then the iPod's huge market share doesn't matter. They could buy their songs at any store and play them with their iPod, so the labels would feel alright about not renewing their contracts with Apple.
9. Apple knows that the labels do have a point, and that they are using drm as a method to maintain their monopoly. They know they can't win that one in the courts, so they start this whole campaign of, "we really don't want DRM at all, but they're forcing us to do it."
10. The idiot public thinks that Apple really does dislike DRM. What apple is betting on instead is that the labels will be unwilling to sell music without DRM, so it's not going to be an issue. They do need to sell their bluff though, so they hook up with MGM. "You wanted higher prices for your songs, right? Well, we'll give you the higher prices if you sell no-DRM songs with us." They believe this will accomplish two goals: The first is to show that they are serious about disliking DRM, the second is that with the higher prices, few people would get the no-drm / higher bitrate songs. Few people even know what drm is, they're just going to get the lower priced version of the song.
11. Universal is in a really tough spot. They can't just go begging back to Apple, or they're likely to get an even worse deal then they had before (more of the $0.99 going to Apple). The lack-of-interoperability argument doesn't work anymore because of the MGM songs. They really have only one of two options. Stay with the completely irrelevant DRM model and sell songs that won't play on the iPod, or enter deal with other companies to sell DRM-free songs, so that they WILL play on the iPod.
12. Microsoft won't consider that, of course. Doesn't give them any advantage in selling hardware.
13. Wal-Mart is all about it. It will give them an edge when they launch their music store. "It plays on the iPod." They also want to be highly competitive, so they negotiate to make their songs cheaper. "It pl

Re:The likely outcome

[nine-times]

I agree that the whole thing wit Amazon is kinda fishy, but I don't agree that it should stop people from buying from Amazon. The way I see it is this: People should buy cheap DRM-free music from whatever source they like, and avoid buying DRMed music.

Because let's say people drop iTunes and move to Amazon, buying tons of MP3s. Well, the MP3s don't tie them to continuing to use Amazon's service. You can still use your iPod, or any other MP3 player you choose. Now let's imagine that, having won a lot of market share, the big labels force Amazon to raise prices and use DRM. Right then, stop using Amazon.

Your years of using Amazon won't tie you to Amazon as long as it's all DRM-free. And if Amazon is a huge success with cheap DRM-free music, and their sales dry up when they increase price and add DRM, then it sends a clear message: consumers want cheap DRM-free music. Consumers are willing to pay for cheap DRM-free music. If you want to make money selling music, the music must be cheap and DRM-free.

That's the message we all want to send, right?

Those artists are irrelevant, not the store

[Anonymous Coward]

In the market, my subject might be wrong. . . time will tell. I've, personally, made a decision. Any song I can't buy without DRM *does not exist* to me. I *will not* purchase any music with DRM, as it just perpetuates the problem. So, maybe some of the songs I know from the radio, tv, and movies isn't available to me. I don't really care. Instead, I'm trying to use this as an opportunity to discover new music by musicians/labels that *will* sell me the music without DRM (I realize a lot of artists don't have control over their own music, but that's between them, their agent, and their label).

The biggest problem, I see today, isn't the mindset/culture/attitude of labels. It's the mindset/culture/attitude of consumers. The greatest power consumers wield is the power to take their business elsewhere. Note, you do NOT have the power (legally) to rip off the music by downloading it from illegal sources, and when you do that, you are just proving that you are still that labels/artists *slave*. They own you. When you simply don't purchase their music, and instead purchase someone else's music, you do 2 things that are very powerful. 1) You make it profitable for people to sell you non-DRM'ed music, thus making it a viable alternative to DRM'ed tracks, and 2) the money that you send to those sellers can be used, over time, to shift power from the labels whose DRM'ed music sales are declining, to the labels whose DRM-free music is growing, thus ensuring that more and more artists will be signed to non-DRM labels, and fewer and fewer are signed to the DRM labels, making it more likely that your favorite music will be non-DRM.

And of course, the DRM labels will, if they see the other labels having success at their expense, do a complete 180 on this issue. They won't ride DRM into their own graves. By myself, I will likely make no difference, but if a lot of consumers vote with their dollars, it will force the labels to sell the music without DRM. Essentially, consumers get what they pay for, and right now, they are paying for DRM. I for one refuse to pay for DRM.

Re:Nice

[osu-neko]

You think Apple lowered the price because of competition?

I do.

Apple weren't profiting of people's desires to have DRM free music,

That's false. People were paying more money for the same music. If, as you indicate below, having DRM increases costs, then people were paying more money for something that was cheaper to produce. Either Apple was profiting from people's desires for DRM-free music, or Jobs lied about DRM increasing costs.

Jobs said himself that he is opposed to DRM, and that having DRM creates overhead that increases the cost.

This is true, but doesn't support your assertion that Apple wasn't profiting from the desire for DRM-free music, in fact it undermines it. Both the fact that it costs more to produce DRM'ed music and the fact that Jobs opposes DRM'ed music would support the notion that Apple would profit more from DRM-free music.

So of course he wouldn't sell DRM music for extra if he didn't have to. He wouldn't be so hypocritical as to call for everyone to embrace and request DRM-free music, and then charge extra for DRM-free music.

Huh? There's nothing hypocritical about that. For years, Apple has asserted that their computers are a greater value, and charged more for them. Jobs insists that DRM-free music is a greater value, and that everyone should insist upon having it. What would be at all inconsistent about charging more for a better product?