Thoughts from Kansas

The University of Chicago's Randy Picker discusses the implications:

Apple and EMI announced today that they would start selling higher-quality DRM-free music on iTunes at a price of $1.29 per track, 30 cents more than iTunes’s standard 99 cents price. This is an outgrowth of Steve Jobs’s Thoughts on Music (my post on that here). The press conference slides indicate that 84% of surveyed European consumers would like to be able to move their music files between devices and this will make that possible. This is an interesting expansion of the iTunes business model, and one that should further accelerate the death of the CD. The ease of use that people associate with music CDs is coming to iTunes.

The music Apple currently sells on iTunes restricts what you can do with it. You can only play it on a certain number of computers, you can't sell it to someone else, you can't change it to a different format because letting you do that would let you circumvent those rules, and because then you'd be able to play your music on something other than an iPod. Steve Jobs has claimed the restrictions (digital rights management = DRM) were required by the music companies, but people have always suspected that it was also a great way to lock consumers in to the iTunes/iPod platform.

Selling music for 30¢ more that you can use however you want is smart business. Many people will probably continue buying the cheaper music because they don't find the restrictions to be obnoxious. But people who don't own iPods, who want to stream music to non-Apple stereo systems, or do other fancy things will pay the extra money for the extra rights.

Will this help Apple avoid a French anti-trust suit? Will it weaken their hold on the online music market? Hard to say. I doubt it'll hurt music sales, and I'm inclined to think that iPod sales have stayed strong because of the quality of the product, not because of any lock-in due to Apple's DRM.

The hope is that music labels will see that consumers appreciate not being treated like criminals and will stop trying to take away our rights. Attempts to graft DRM onto compact discs have failed, and many of the attempts to add DRM to online music have too. For a long time, consumer advocates have said that the real problem the music industry faces is a crappy product, not piracy. DRM that's meant to block piracy is said to simply show disrespect on the industry's part, and to ultimately reduce sales.

EMI has been experimenting with DRM-free music already, and seems to like what they've found. Let's hope the other labels learn the lesson.