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Sat, Nov 07, 2009 - 05:23 PM EST  —  AAPL: 194.34 (+0.3099, +0.16%)  |  NASDAQ: 2112.44 (+7.12, +0.34%)

Report: Apple’s iTunes Store to go DRM-free, offer labels more flexible pricing
Monday, January 05, 2009 - 10:51 PM EST

"Apple has cut deals that will finally enable iTunes to offer songs free of copy protection software from the three largest music labels, according to two sources close to the negotiations. In exchange, Apple has agreed to become more flexible on pricing, the sources said," Greg Sandoval reports for CNET.

"Under the terms of the deal, song prices will be broken down into three categories--older songs from the catalog, midline songs (newer songs that aren't big hits), and current hits--said one of the sources," Sandoval reports.

With EMI already long aboard Apple's DRM-free train, "these new deals will expand iTunes' DRM-free library to include songs from the other three major labels (Sony BMG, Universal, and Warner Music)," Sandoval reports. "The good news is that the price of catalog music is falling to 79 cents per song. The labels will get an opportunity to price some hit songs for more than 99 cents but eventually those songs will drop to 79 cents, according to one source. Before iTunes users get too worked up, they should remember that song prices at iTunes haven't increased in five years. According to the Consumer Price Index, a 99-cent song in 2002 would be worth $1.17 today."

"Apple and the music labels have also apparently come to terms on over-the-air downloads, according to a source. That would allow iPhone owners to download songs to their mobile devices via cell networks," Sandoval reports.

More info in the full article here.

[Thanks to MacDailyNews Reader "James W." for the heads up.]


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Jan 05, 09 - 11:28 pm Comment from: ragarcia

OTA downloads would very welcome!

Jan 05, 09 - 11:31 pm Comment from: Disappointed

I always liked the simplicity of iTunes. When you went to buy a song, you knew that it was 99 cents, because they were all 99 cents, and that it was always 99 cents. Once they start variable pricing, you won't know until you find that specific song what the price is, and you won't know if you could get (or have gotten) a better deal by buying at a different time, either earlier or later. It introduces an element of uncertainty into the buying process that I personally don't like. Your mileage may vary.

Also, I find it hard to believe that this will benefit consumers by lowering prices. I'm sure the labels see this as a method to extract more money from consumers. We'll see how many songs are lower than 99 cents, and how long it takes them to get there, as opposed to songs that are above 99 cents.

Jan 05, 09 - 11:36 pm Comment from: Thinker

Since I'm a fan of older music. this is good news (if true). That said, I'm going to continue purchasing all of my music on CDs until the entire iTunes Store music catalog is both DRM-free and lossless.

Jan 05, 09 - 11:39 pm Comment from: TowerTone

I'm fed up with the DRM mess.
1 iPhone + 2 iPods + 1 girlfriend + 3 kids x 5 macs + 3 accounts = HELL!

Syncopation helps, and Simplicity is cool, but it sucks that I am not a thief yet treated like one.

Jan 05, 09 - 11:42 pm Comment from: TowerTone

Make that Simplify, not Simplicity.

http://www.simplifymedia.com/

Jan 05, 09 - 11:50 pm Comment from: Shadowself

I'm not interested until they offer lossless compression. Why settle for less than I can get on a CD? And no, I don't use those crummy Apple earphones -- either kind.

Once Apple offers lossless compression I will only buy online. Until then, no sale.

Jan 05, 09 - 11:55 pm Comment from: don

Older music doesn't necessarily mean it will be the cheaper price. Movies on itunes proves that. Older movies that are popular or classics are priced at 14.99 not 9.99

Jan 05, 09 - 11:56 pm Comment from: don

Older music doesn't necessarily mean it will be the cheaper price. Movies on itunes proves that. Older movies that are popular or classics are priced at 14.99 not 9.99

Jan 06, 09 - 12:06 am Comment from: @don

I agree

I agree

Jan 06, 09 - 12:09 am Comment from: @Shadowself

First off, Elfquest fan?

Second...I don't think you should hold your breath for Lossless OTA - or over the wired net either...the server and bandwidth requirements would - well, quite possibly slow the entire internet down. It would certainly send a bunch of ISP's - that ALREADY wanna charge on some type of per/GB/month model - over the edge and into our wallets...

Jan 06, 09 - 12:09 am Comment from: OTA

and i always thought the OTA air thing was an at&t;thing, where at&t;restricted it to reduce network load.

Jan 06, 09 - 12:18 am Comment from: rickw

I agree with Tower Tone, I have 3 Macs 7 iPods and an AppleTV and I feel like a freaking criminal, even though I've spent a lot of money on iTunes over the years.

Jan 06, 09 - 12:32 am Comment from: ken1w

That's fine, I suppose. Most of the songs I buy are older songs and genres such as Jazz, so if this is true, the cost for me will be generally lower going forward.

So if this is true, Apple has made "concessions" that allow the iTunes Store to generally sell songs for even less than 99 cents (on average), which is probably what Apple wanted because the iTunes Store is really a value-added service for iPod owners. In exchange, the record labels give Apple everything Apple wanted, including the removal of DRM. Apple will be the hero for removing DRM from music forever, even though they actually benefitted more from having DRM in place for all of these years.

The executives in the music industry have been so thoroughly manipulated by Apple that they probably think they won these negotiation. In fact, this change will make Apple even more dominant, and make it harder for other online digital music vendors (such as Amazon) to compete and make money. Unlike Apple, they make money from selling the music, not from selling the iPods that hold the music.

Jan 06, 09 - 12:32 am Comment from: Predrag

Lossless is not going to happen. Anyone waiting for it may as well keep buying SACD or DVD-audio. Ordinary CDs are practically indistinguishable from iTunes plus, especially on contemporary music, anyway.

For the rest of the world, we can now go back to our normal lives, and recording industry will now have a chance to live.

Jan 06, 09 - 12:43 am Comment from: GregoriusM

Some 256 AAC is pretty close to CD quality especially for contemporary music, but we can have this debate forever.

My question is: Does the taking away of DRM automatically also mean that all of the music will become 256 AAC?

That is not mentioned at all in the article. I could "live" with 256 although Apple Lossless would be much, much preferable.

Jan 06, 09 - 01:59 am Comment from: BC Kelly

Please

" ... allow iPhone owners to download songs to their mobile devices via cell networks ... "


Thank You

BC

Jan 06, 09 - 02:54 am Comment from: The Muffin Man

Thinker,

my feelings exactly!

No lossless; no money from me!

Jan 06, 09 - 03:02 am Comment from: The Muffin Man

. . . . . and to those who can't tell the difference . . well . . ehh . . .

No comment!

Jan 06, 09 - 03:05 am Comment from: The Muffin Man

No, second thoughts . . .

Buy Shure 500's and you bloody well will here a difference!

Jan 06, 09 - 05:04 am Comment from: ken1w

Apple seem to have plenty of customers using the iTunes Store, even with the "boycott" from the silly audio snobs. smile

Jan 06, 09 - 05:30 am Comment from: Ok, Muffin Man!

The average--and even above-average--music fan won't really care about the difference. And before you start getting all high and mighty about *who* can tell the difference, you may want to (ironically) learn to spell the word "HEAR" correctly.

Fail.

Jan 06, 09 - 07:13 am Comment from: Cubert

Justice Department, stand down.

Jan 06, 09 - 07:20 am Comment from: solid

If this rumor is true, then it had better be 256 AAC across the board at the iTunes Store. I can't distinguish much difference between 256 and lossless, but I sure as hell can recognize the tinny sound of 128 AAC.

Jan 06, 09 - 08:47 am Comment from: GizmoDan

This article is titled a Report. Sounds like a Rumor to me.

Jan 06, 09 - 09:02 am Comment from: Drew_Ill

As bourght up in the full article, will they strip the existing DRM off your previously purchased iTunes songs??? God I hope so.

Jan 06, 09 - 09:42 am Comment from: Mykos

the only thing of interest as of right now :

• For how long is a "hit" classified as such?

• Will the removal of the DRM layer also mean recoding of the track itself ie going to 256 kbps?

• And maybe most important, will Apple repeat their absurd stunt (as with the EMI tracks) and force people to either update ALL their purchased tracks or NOTHING? Because there is no way in the world I'm going to update 4-5thousand tracks. I never updated my EMI tracks because of this ridiculous "feature".



...Oh, and when will Pandora be available outside of the U.S (again) ?

Jan 06, 09 - 10:03 am Comment from: Predrag

If you had originally bought iLife 06, would you honestly expect for Apple to give you a free upgrade to iLife 08 when it was released? Explain to me please, what gives you the right to justify getting for free an upgraded version of the same product (256kbps DRM-free, vs. 128kbps FairPlay-protected), only because you bought yours some months or years ago?

I also bought a Honda Civic in 2005. Since Honda has come out with a new 2009 Civic, I believe they should allow be to turn the old one in and get the new one for free. After all, it IS the same product -- Honda Civic.

Apple customers (especially very loyal ones) tend to have this unexplainable sense of entitlement, just for being Apple customers.

Jan 06, 09 - 10:13 am Comment from: HMCIV

If it's more than a dollar, I ain't buying.

Jan 06, 09 - 10:28 am Comment from: Predrag

I had spend most of the last 30 years in music recording business. A lot of it was recording classical and jazz. From the old analogue days (recording on a 2-inch 24-track tape, mixing down to Studer 1/4 inch tape recorder), to the new Pro Tools workflow, with 24bit / 192kHz interfaces and SACD mastering. There is no question that, under fairly rigorous conditions, even very lay person can easily tell the difference between a 128kbps AAC-compressed file and one of those SACD master recordings of the same musical work. Now before some of you begin to chime in their "Thank you!"s, let's re-examine what I just said. Under fairly rigorous conditions<b> does <b>not mean an iPod with earbuds (i.e. majority of today's music buying public), or a $150 home stereo with cheap plastic speakers.

Apple will NEVER sell lossless music because there is no money in it. Even if they somehow convinced the labels that they should do it, the retail price for those tracks would have to be pretty steep in order to justify the storage, bandwidth and processing muscle to convert tracks into lossless.

For the (very, very) vocal minuscule minority of audiophiles here, I would recommend getting a good tube preamp, proper speakers, high-quality speaker wires, put it all in a properly treated room with acoustic wall and floor treatment and getting some well-mastered SACDs. That way, you'll have proper conditions to actually hear the quality difference between an AAC file and a SACD.

If all you'll do is download a lossless file onto an iPod, you're wasting space on that iPod.

Jan 06, 09 - 10:32 am Comment from: ivoclar

@Mykos

good point! I would love to update a part of my playlist (mainly the classical, soundtracks and jazz tracks) but if im forced to update everything i'll pass. Also, that would simply be too expensive.

Jan 06, 09 - 11:05 am Comment from: Galloway

I agree with Predrag: Apple is never going to sell lossless files on iTunes. Too small a market, too much storage and bandwidth. If they do sell lossless they will have to charge a big premium.

The real question is, if the iTunes store goes DRM-free and 256kbps AAC on all music, will this lead to the end of physical CDs? Or at least greatly accelerate its demise?

I've always bought on CD for the quality and flexibility, but if DRM is really gone and everything is 256kbps AAC, I might just change my habits in a big way. Anyone else?

Jan 06, 09 - 11:18 am Comment from: Thinker

@ Predrag
My 7.1 sound system (with only 6.1 speakers) is prosumer quality at best. Furthermore, I have never owned an SACD in my entire life (because of the medium's DRM).

Nevertheless, I can definitely hear a significant difference in quality between 256 kbps AAC files ripped from a store-bought CD and lossless files (Apple Lossless, FLAC, etc) ripped from the same CD. While the difference in quality is most apparent to me using an S/PDIF connection between a computer and my receiver, it is also audible using my iPod an inexpensive Radio Shack 3.5mm (stereo) to RCA cable.

I also disagree with that bandwidth argument that you and others are using in this thread. Apple can afford storage for and the internet can handle compressed yet large HD movies & TV shows from the iTunes Store. Apple can easily provide lossless music.

I'll admit, however, that some ISPs don't provide the necessary bandwidth per month. I'll also admit that some people still use computers with hard drives to small to hold very many lossless songs. Apple should continue to provide AAC for these customers, with free upgrade of every track to lossless once said customers have better ISPs and larger hard drives.

The painful truth is that Apple makes more money with the iTunes Store by catering to the "uneducated masses" than it ever will catering to audiophiles. If the day ever comes when uncompressed/lossless audio is no longer available to consumers, I'll probably stop adding to my music collection.

Jan 06, 09 - 11:21 am Comment from: Thinker

Lots of grammar mistakes in my previous post... Sorry!

Jan 06, 09 - 11:44 am Comment from: DRM sucks

Maybe Apple finally broke the majors on the pricing, but I will be surprised if the pricing structure ends up being good for consumers. This is pretty open ended: " The labels will get an opportunity to price some hit songs for more than 99 cents.." However, the move to 79 cents/track is encouraging.

FLAC or other lossless formats: well, I will again beat the Bleep.com drum. They offer FLAC and wav files for some tracks.
You can also get lossless formats through Beatport.com. Both cost more than lossy formats.
Although they are a niche store, it does exemplify that even a small provider can afford the necessary bandwidth. Oh, and neither have DRM.

Jan 06, 09 - 12:01 pm Comment from: Galloway

@DRM sucks: It's not that Apple couldn't afford the bandwidth for lossless, it's that it would pass on those costs to the consumer.

Also, I have trouble believing the major labels would let Apple offer lossless files without DRM. Selling 256 kbps DRM free still preserves the market for audiophiles who will not buy lossy files at all. But DRM free lossless? That would give most (idiotic) music executives visions of a single lossless copy being sold of everything, then pirated like crazy.

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