Apple is stepping off its pedestal April 7th to provide its 10 million iTunes songs free from DRM entanglement. Finally! But of course there’s no free lunch here. While every other store in the country is advertising vast sales, iTunes is raising their prices. Customers will pick up the extra 30% price increase with three variable price levels: 69 cents 99 cents and $1.29.
While Apple announced this change in January at the last MacWorld Expo, it wasn’t until last week the Los Angeles Times reported the April 7th switch date. Unfortunately, Paul Resnikoff, publisher of Digital Music News says labels will favor the $1.29 price tag.
Steve Jobs has been battling the major record labels for years on this issue of rights but has finally relented. Record labels hope providing full rights of ownership will reduce pirating, but in a recession that’s doubtful. People who care about DRM rights don’t buy from iTunes (Myspace, Amazon, and Wal-Mart have been offering this for months) and raised prices aren’t going to change this. Lefsetz writes in a January letter, these record labels are “fiddling while Rome burns.”
Former EMI Music executive Ted Cohen and managing partner of digital media consulting firm TAG Strategic says, “This will be a PR nightmare. It is for the music industry what the AIG bonuses are for the insurance industry.”
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