Want to Copy iTunes Music? Go Ahead, Apple Says
SAN FRANCISCO — In moves that will help shape the online future of the music business, Apple said Tuesday that it would remove anticopying restrictions on all of the songs in its popular iTunes Store and allow record companies to set a range of prices for them.
Context & Ripple Effects
Reports in November 2008 and January 2009 had already pointed to negotiations over DRM-free iTunes tracks and variable pricing. The move formalizes a break from the earlier arrangement in which Apple set the price of song downloads and arrives after talks with music labels over DRM-free music.
Removing copy protection makes iTunes purchases more portable, while variable prices give labels a direct role in how individual tracks are positioned in the store.
First-order effects
- iTunes customers can copy purchased songs without Apple’s anticopying restrictions, reducing the lock-in created by protected files.
- Record companies gain the ability to price songs within a range rather than sell every track at a single Apple-set price.
Second-order effects
- Apple must operate iTunes with less control over post-purchase use of music, making the store’s catalog and buying experience more central to its appeal.
- Labels can test whether premium pricing on selected songs yields more revenue than the uniform download price Apple had maintained.
Third-order effects
- The change points toward a digital-music market in which access restrictions give way to pricing and catalog terms as the main levers of control between platforms and rights holders.
The trend: Online music distribution is shifting from platform-enforced copy protection toward licensing arrangements that trade greater consumer portability for more label pricing flexibility.