iTunes’s “flexible” pricing? DRM-free… at a cost? I think Steve’s lost it.

The MacWorld keynote by Apple this year, on Tuesday, lacked a lot of the flair and zingers that usually comes with these keynotes. A sickened Steve Jobs meant that a dude named Phil would attempt to market new Apple products without a Reality Distortion Field to make them, well, viable. As a result, the only thing that piqued my interest the first hour of that keynote was Sting's sexy grizzly beard. Which was immediately lost when the screen switched to Patrick Stump.

Actually, the only thing that really piqued my interest at all was Phil's "One Last Thing." It was about iTunes... and it was QUITE interesting.

First, prices. Starting April 1 (bad day to do it), the fixed-pricing model of 99¢-a-song, a long-time pillar of the iTunes foundation, will fall. In a move clearly intended to please labels, a three-tier system of pricing will take its place. While the option of 99¢ will remain, labels will have the option of selling songs for 69¢ and $1.29 each. Album costs remain fixed at $9.99 at this point in time. How will the labels handle this? It's not hard to guess.

The other announcement? Quite a bit nicer: ~80% of the iTunes Music Store is without DRM restrictions, and at double the bitrate (i.e. HIGHER quality), bringing in the major labels as well. Perhaps, the labels did this in exchange, but we'll never know. The process is continuing as we speak, and by April 1, the entire store shall be in DRM-free "iTunes Plus" format.

But wait! You say you have a bunch of old, standard-fare iTunes songs and you want to make them all iTunes Plus? Well, you can do that, but that'll cost you 30¢ each to upgrade. Not bad for a few songs, but when you got a few hundred, it could be pretty costly. Not to mention you still have nasty "watermarks" in your music that hold your private data.

The way I see it, even when you win, you lose.

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