Consumers now have a choice in music encoding when they purchase EMI songs on iTunes: pay $0.99 and get the song with standard DRM or pay $1.29 and get the song encoded at 256kbps AAC (DRM-free). Apparently any full album purchases will still be at the same price, but will be DRM-free. As an added bonus, customers that previously purchased DRM'd songs for $0.99 will be able to "upgrade" to the non-DRM tracks if they pay the $0.30 upgrade -- I'd like to actually see Apple create a filter for my library that shows me the tracks that are available for upgrade and offer me the ability to do so with a single click.
All of this is great and is likely where the industry is headed. To summarize what Jobs said: they really are offering nothing more than the consumer expects when they rip a CD. Good point.
Here's something interesting to think about: Where's the extra premium going? EMI has created a premium choice for consumers that want to purchase individual tracks and, sure, they've encoded the songs at a higher sampling rate, but in actuality it doesn't incrementally cost EMI more to encode tracks at a higher sampling rate without DRM. My guess is that they extra $0.30 goes straight to the record company (i.e., no split on the incremental lift with iTunes or the artist).
Something else interesting to think about: For years people have wanted Apple to license out their FairPlay DRM scheme, but Apple had never done it. If Jobs is correct and 50% of music available on the iTunes store is DRM-free by the end of the year, Apple never will have to license FairPlay because it will simply fade away, at least for music. I think that Apple no longer see FairPlay as the lock-in to Apple hardware; they've got such penetration and such a loyal audience, that their hardware sales will continue provided they continue to innovate. Furthermore, Apple can lead the new market in video and lock people to the iPod standard in that market while still capturing music sales through iTunes.
Here's where I net out on this: I'm probably not going to pay to "upgrade" any of my previously purchased songs. If I ever get to the point where FairPlay is negatively impacting my experience, I'll just burn a CD and rip the music off of it. It's unlikely that I'll stop using iTunes for my music management and unlikely that I'll stop using the iTunes Music Store; I may think about paying for the "premium" version of individual tracks, but then again, I might not. I'll probably continue to buy iPods and AppleTVs and iPhones, but perhaps I'll be happier that my music can play on other AAC-capable devices (Sonos would be a good reason to think about purchasing "premium" and being happy that albums will be DRM-free).
Link -- TechCrunch coverage