iTunes Scraps DRM, Introduces Variable Pricing Scheme

Apple has scrapped DRM protection from the iTunes store and also introduced a three-tier price structure, three months after it first announced the move.

The move, which came into place simultaneously in a number of territories, sees Apple price music downloads according to their popularity with popular acts being priced higher than new release.

Apple however has confirmed that most of the 10 million songs on iTunes would remain at 99 cents (or 79 pence in UK) and that for every song that goes up in price, 10 will fall down in price.

But as I4U points to, this is worthless if you don't want actually want the bargain tracks. New releases will cost 59 pence with in-demand tracks going for 99 pence.

All tracks on iTunes have also been converted from 128Kbps to 256Kbps at the same time, although existing customers will still be stuck with their same file format.

The price change is the first since 2003, when iTunes was launched, and comes a day after rival Amazon announced that it would be slashing the price of 100 MP3 songs to 29p only. The e-tailer currently has nearly 4800 tracks available at this price.

Apple's decision to adopt variable pricing is largely seen as a concession to the music industry with major recording labels saying that flexible prices will allow them to remain in the black.

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Our Comments

Apple controls between 70 (according to Reuters) and 90 percent (according to Times Online). But that could change in the long run as iTunes is no longer seen as the only kid in town. Amazon has shown some impressive qualities and if it manages to produce a music experience as seamless as iTunes (for example through an alliance with Songbird), it could well gnaw away some market share.

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