Ding-dong, DRM Is Dead — But Here Comes Variable Pricing

Digital Rights Management (DRM), at least as it relates to music, is finally taking a dirt nap. Apple’s iTunes Music Store is now 100 percent DRM-free. This morning, when I upgraded to the latest version of the iTunes software to buy the new album by Midival Punditz and Ursula 100, it seems all music is now DRM-free. Apple first announced in January 2009 and said it would introduce DRM-free iTunes in April 2009, starting with 8 million tracks and eventually making the entire library overtime.

All songs I buy from iTunes will play on most of my devices. Such as my Sonos Digital Music System. I think it’s a brilliant and much needed move, though I’m not sure I’m going to spend hundreds of dollars to upgrade to DRM-free version of my tunes. I mean I paid for them once; why pay again? Why not just make existing files DRM-free without making us pay up. It shouldn’t be that difficult to do.

The DRM-free iTunes however has its downsides, because with it has come with variable pricing, which includes paying $1.29 for some songs. These songs don’t have anything special about them, like special artwork or a higher bit rate. They just cost more because music industry executives say so. Hypebot, an excellent music industry blog, sums it up best:

Variable pricing has come to iTunes; and once again, the four major labels failed to use the opportunity that the long anticipated change provided to repair its damaged relationship with consumers. Instead of delivering more value in the form of additional content along with the higher price, the major labels upped the price of their most popular titles almost 30% just as many consumers began getting comfortable with paying for downloads and in the middle of the worst economic downturn in decades.

Variable pricing and DRM-free music have been available for a while, but since Apple dominates the digital music download business the way Microsoft dominates the desktop OS business, these new changes in in iTunes offerings have a larger industry wide ramifications. I think many (if not all) digital music download stores are going to be challenged in face of competition from Apple. Amazon (s AMZN) is one company that I feel will be able to withstand Apple in the marketplace.