Apple’s New Music Era

Apple announced today, among other things, that iTunes will go DRM-free on over 8 million tracks today, and all 10 million within a couple of months.  More importantly, they are moving to a flexible pricing tier, with tracks costing between $0.69 and $1.29.

Overall, this is a big shrug of “meh” coupled with a shockwave effect in the industry.  For better or worse, iTunes + iPod is the defacto standard in the digital music industry.  So for them to go completely DRM free is bound to raise a few eyebrows, never mind the fact that Amazon.com has had a DRM-free (in MP3 format no less) store for a while now, and the Zune Marketplace, in also going DRM-free for purchased tracks, also embraced MP3.

The shrug comes from them not switching to MP3.  Files will still come down in AAC format, which is fine but still not a universal standard for MP3 players (yes, Apple fanboys, there are other players beside the iPod, and many of them do not support AAC format.  And yes, they do matter.).  If Apple wanted to really knock it out of the ballpark, they should have embraced the MP3 format.

The shockwave effect is due to, whether you love it or hate it, other companies tend to follow Apple’s lead.  Steve Jobs wrote an open letter wanting DRM-free music?  Within months the push was on to make it so, and Apple did it, with other online stores following suit.  Apple made $0.99 the standard, and just about every other store has done the same.  Now, with flexible pricing, you can bet that Amazon, Rhapsody, and Zune Marketplace will be implementing similar policies over the course of the next year.

Is it a win for the consumer?  Most likely.  Sure, a lot of people love “Karma Chameleon,” but that song was played out by 1985.  For $0.69, I might be willing to play it out again.  If Apple is smart, they will keep albums at the $9.99 mark, because $15.48 for an album isn’t going to cut it- you might as well purchase the physical media.  On the other hand, a plethora of $6.99 albums on iTunes could provide a good boost to the music labels’ bottom lines- but then again, this is something Amazon has been providing for a while.

There is something to be said- and no doubt the blogosphere will analyze this detail to death- for the fact that Jobs and Apple actually bent on the pricing, after stiff-arming the labels for years on keeping the price of tracks at $0.99.  What prompted the change?  Have the music labels somehow found a way to gain the upper-hand on the once indomitable Apple?  That will be interesting to see how it plays out.

In the meantime, what do you think of these changes?  Will you be upgrading your previously purchased tracks to the new DRM-less ones?  And does this tempt you back to the iTunes store if you had previously drifted away?

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