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Apple changes its iTune- good for consumers and labels?

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Tuesday, Jan 6, 2009

Barring the appearance of Apple overlord Steve Jobs, who had to assure the market that he’s just got a hormone problem (which kept the company’s stock buoyant), the big announcement at Macworld was not about any new gizmo to rival or update the iPhone but some changes in iTunes as their big attention getter at their last appearance at the fest.  In their battle with the big labels, Apple finally decided to cave in and offer ‘flexible’ pricing, which means that hot new hits will cost more than 99 cents/song while less sought-after olders may be priced lower.  The labels figured that the laws of supply and demand would work in their favor this way rather than the easy one-size-fits-all model that Apple’s touted since it started their music service. 


For Apple, it will likely change very little since they were making tiny profits actually selling songs- their dough comes from sales of their sleak little gadgets (iPhone, iPod, etc..).  For the labels, it’ll be interesting to see how much this change effects their bottom line, if it does at all.  You can maybe assume that most iTunes users won’t jump ship unless the pricing gets too high for the songs but since iTunes is the biggest online music seller now, the change will definitely help the labels rake in more money.  But will it be enough to keep them afloat?


The other big news about changes in the iTunes model is that the songs offered there won’t have DRM anymore.  That means that they can get transferred freely and without any restrictions from one device to another to any computer to anywhere else.  That would be great news for the people who are gonna start buying now but what about all the chumps that already bought iTunes songs with the DRM on them?  Are they gonna be able to automatically get the same songs from iTunes without the DRM now?  Doubtful.  That might lead some resentful users to find their songs from other sources, especially ones that the labels don’t approve of.  As such, maybe Macworld will miss Apple at their conferences but some of their users might not.


UPDATE: Apple is offering uses the chance to convert their old DRM-tagged songs that they’ve bought from iTunes to be stripped of the copy protection for 30 cents a song.  Jobs and friends really should know better than to fleece consumers like that.

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