Jobs confirms iTunes Plus price drop across the board
Not a full day after our initial report that Apple planned to drop the price of all its iTunes Plus tracks (as well as add a number of indie labels to the mix), many users started seeing the changes slowly trickle down from iTunes' servers.
Context & Ripple Effects
Yesterday's report that iTunes Plus was expanding and dropping to 99 cents has moved from rumor to confirmation: Steve Jobs himself has confirmed a price cut across the board for every iTunes Plus track, and users were already seeing the new pricing trickle down from iTunes' servers within a day. The pickup by CNET News.com shows how quickly the story traveled beyond the Apple-watching press.
The second half of the move matters as much as the price: Apple is adding a number of independent labels to the iTunes Plus catalog at the same time, so the DRM-free tier is growing in selection even as its premium disappears.
First-order effects
- Buyers can now get DRM-free tracks at 99 cents — parity with the standard protected download — which removes the price penalty that had been the main reason to stick with DRM'd files.
- Independent labels gain access to the DRM-free tier immediately, widening iTunes Plus beyond the majors that launched it.
Second-order effects
- With DRM-free no longer costing more, the remaining holdout labels face a shrinking argument for keeping copy protection on their catalogs — their differentiation against iTunes Plus just went to zero.
- Apple's store becomes an even stronger reference point for digital music pricing: a single-player price cut across the board pressures any rival storefront or label-direct service competing on per-track cost.
Third-order effects
- If DRM-free-at-parity holds as the pattern, copy protection shifts from being the default condition of a download to a liability a seller must justify — putting Apple's scale, not the labels' licensing terms, in the position of setting the market's pricing floor.
- A broader DRM-free catalog inside iTunes also strengthens the iPod-iTunes lock-in: the more of the market Apple sells unprotected, the less leverage any competing device or store gains from interoperability arguments.
The trend: Digital music retail is converging on DRM-free catalogs priced at parity with protected downloads, with Apple's iTunes scale setting the terms the rest of the market has to match.