Apple made what is supposedly their last appearance at the annual Macworld conference in San Francisco yesterday. In the final day’s Key note speach Apple’s senior vice president of world-wide product marketing Phil Schiller (how does he fit that title on his office door?) announced that apple would be removing digital rights management from all music sold on itunes. The move sees 8 million songs DRM free with immediate effect, with the final two million to be DRM free by the end of March.
The decision to remove DRM from itunes has long been on the mind of Apple’s CEO Steve Jobs, who was sadly unable to deliver his usual keynote speech due to serious illness. In 2007 Jobs published an open letter, ‘Thoughts on music’ in which he called for major record labels to drop DRM. It’s taken time but Jobs has achieved his aim with Sony BMG, Universal and Warner finally reaching an agreement.
Digital Rights Management (DRM) technologies are in layman’s terms a means of controlling the usage of digital media by preventing access, copying or conversion to other formats by the end user, meaning that though a buyer has paid for a product, they are not free to use that product in any way they wish. With regard to itunes the music files are encrypted preventing play on any product other than itunes or the ipod. Files can also be played on only five different PC systems which must be authorised by the account holder from which the music was purchased.
With the dropping of DRM Schiller also announced that the current price policy of one price for all would also be changing, introducing a two-tier pricing system with DRM free itunes tracks costing an additional 30 cents, it is so far unclear if an increase in price will also be seen in the UK where currently plus tracks cost the same 79p as older tracks. Mark Mulligan, a director with market analysts Jupiter Research, reacted to this by saying the end of DRM in its current form was inevitable, “Ultimately, what we’re going to end up with is a new form of DRM. The more you pay, the less DRM you get bolted onto your music. Premium music will be DRM free, the cheaper it gets, the more shackles are attached,”
Following the successful launch of Amazon’s DRM free download service it seemed inevitable that apple would be forced to react or lose market share, however I’m a little concerned that they seem to deam it necessary to charge extra for this service, while the new style tracks are a higher quality, the difference is only really audible on high end equipment, so therefore a moot point with the average itunes user. While no increase in price has been announced in the UK the charge to upgrade previously purchased tracks to the new format is twenty pence I can’t help but wonder if a 99 pence price point is being considered in the future, 30 pence higher than many tracks offered by Amazon (starting at 59 pence, with most priced at 69p).
While DRM may not be an issue to the average itunes user, that doesn’t mean that they will be unaffected by the issue, while it currently looks like the major record labels are through itunes taking a step in the right direction apple will have to take care not to price themselves out of a market which in 2009 as the high street suffers is only going to get larger and more competitive as consumers seek new music at lower prices.