The long and rancorous negotiations between Apple and the major music labels are apparently over and Apple’s iTunes will be able to offer their music DRM-free, but it came at the expense of Apple’s long standing "one price for all" policy:
Apple has cut deals that will finally enable iTunes to offer songs free of copy protection software from the three largest music labels, according to two sources close to the negotiations. In exchange, Apple has agreed to become more flexible on pricing, the sources said.
The three largest labels are Warner Music, Sony BMG and Universal Music Group.
Under the terms of the deal, song prices will be broken down into three categories–older songs from the catalog, midline songs (newer songs that aren’t big hits), and current hits–said one of the sources. Apple has offered songs free of digital rights management protections from EMI for more than a year. But EMI accounts for less than 10 percent of music sold in the U.S.
Apple and the music labels have also apparently come to terms on over-the-air downloads, according to a source. That would allow iPhone owners to download songs to their mobile devices via cell networks and without the aid of Wi-Fi. Apple, which closed the deals last week, could announce the agreements as early as Tuesday at the Macworld Conference and Expo in San Francisco.
There is some questioning of whether the availability of DRM-free music makes any difference to consumers. While I agree that the average consumer probably doesn’t pay attention to DRM in the normal course of events, they get really cranky when for whatever reason their subscription lapses and all their tunes are unplayable.
From the same source, the rumored pricing for the tiers is $0.79, $0.99 and $1.29 per track. Yes, it would have better if they had gone lower at the low end.
Update: Apple did announce it at MacWorld and the prices are: $0.69, $0.99 and $1.29 per track.