At the Macworld 2009 keynote today, Apple announced that by the end of this quarter, all 10 million songs available on iTunes will be DRM free [Digital Rights Management]. As of today, 8 million songs will be DRM free, with the other 2 million done by end of Q1 09. This is long overdue, especially considering that Steve Jobs wrote an open letter to the music industry in February 2007 asking them to abolish DRM. Since that time, many of Apple’s key competitors have gone DRM free or have significantly loosened the restrictions – Amazon in September 07, Rhapsody in June 08, Yahoo Music in July 08, and Walmart in October 08, to mention just some. So it’s great to see the market leader in online music, Apple, actively killing off DRM too.
DRM-free upgrades to your existing iTunes collection are now available via iTunes Plus, Apple’s program for DRM-free music tracks featuring high quality 256 kbps AAC encoding.
Apple also announced a new pricing structure for iTunes, which will start from 1 April 2009. The iTunes service up till now has sold songs for 99 cents each, which when it first launched in April 2003 was a major reason for its initial success. However times change and Apple has decided to offer more flexibility. The new pricing has three tiers: $0.69, $0.99, and $1.29.
At the keynote, Apple noted that it had sold 6 billion songs through iTunes up till now – making it “the world’s largest media library”. iTunes is also now the number 1 retail channel for music in the U.S. – above Walmart, BestBuy, Amazon and Target. iTunes currently has 75 million accounts with credit cards.
Apple also announced that on the iPhone 3G, starting today the iTunes music store will no longer just be available via WiFi – it will be over 3G too. It will be the same pricing model, same selection of music, and no loss of quality. Users can then sync music from the iPhone back to their computer.
What Didn’t Get Announced
There were no technology innovation announcements today regarding iTunes. Last September Apple released iTunes 8 and its ‘Genius’ recommendation engine. We were impressed by it, although we’ve noted since that third parties have come up with better music recommendation plug-ins for iTunes and there are other innovative twists on iTunes functionality. So we think Apple could do more technology innovation with iTunes; although the ‘if it ain’t broke, don’t fix it’ strategy is entirely justified while iTunes is number 1 in its market!
The other major thing missing from the iTunes announcements today, which was among our Web predictions for 2009? Social network functionality for iTunes! Oh well, we’re sticking with that prediction until the end of 2009 😉
Conclusion: Meh
Overall, there were no big surprises at the Macworld keynote in 2009, which surely was the main reason Steve Jobs wasn’t on stage. The iTunes news above was probably the highlight – no shiny new products this year.
The reality is that Apple, ReadWriteWeb’s Best BigCo of 2008, is in a fairly dominant position in a couple of key markets now – music and mobile – so it just needs to tweak the business model rather than astound us with tech innovation (again).
Update: Here’s the official release from Apple. Regarding the pricing changes, Apples notes that “many more songs [will be] priced at 69 cents than $1.29.”
