| Apple holding out for no DRM? |
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| by Stephen Withers | |
| Monday, 07 May 2007 | |
  
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And labels have long wanted to charge higher prices for new songs than those from the back catalogues, but Apple (more specifically, CEO Steve Jobs, according to reports) held out for standardised pricing. Now the iTunes Store is offering different versions of the same track at different prices, the company might be tempted to give way to Sony BMG, Universal and Warner on variable pricing in return for the removal of DRM. That could prove a two-edged sword for Apple. While it would extend the iTunes Store's addressable market to owners of non-Apple music players and phones, it would at the same time reduce the control the company has over the complete user experience. Customers would, for example, need add-on software to make it as easy to synchronise tracks between the iTunes software running on a Mac or Windows PC and their chosen player or phone as it is with an iPod. Would such a change reduce the iPod's market share? Probably not. Market estimates suggest a very small percentage of the music loaded on the world's iPods came from the iTunes Store, suggesting people don't buy iPods because of the Store. This implies that Apple's market-leading position in online music sales is likely to be enhanced, and the iPod's huge market lead shouldn't be significantly affected. Removal of DRM would also improve Apple's standing with European legislators and consumer protection advocates, who have expressed the view that not allowing the use of other types of player with iTunes Store purchases is anticompetitive. If this matter isn't resolved, it could spread to other online music stores selling protected tracks that won't play on the iPod. Europe is also putting pressure on companies like Apple to provide consistent ranges, prices and terms across the EU, but that too requires the cooperation of rightsholders used to dealing on a country-by-country basis, often to the disadvantage of consumers outside the US. Legal downloads of Lost or Desperate Housewives, anyone? And as we've seen with the news about Xbox Live Marketplace geographical restrictions, governments need to get involved to ensure that content that can be legally downloaded to (say) a UK buyer is also legal in Germany.{moscomment} |
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