iTunes Set to Drop DRM: Reports

Apple has offered DRM-free music from EMI for more than a year, though in unprotected AAC format, rather than the more widely accepted MP3 format. This deal would expand that offering to include Universal Music Group, Sony BMG, and Warner Music Group.

According to C|Net (and confirmed by All Things Digital) the deal is done, but with the deal comes variable pricing, which labels have wanted for some time.

According to the reports, there will be three categories:

• catalog music (which is music released prior to the digital era, but later re-released as a digital download) - $0.79
• midline songs (newer, albeit less popular songs) - $0.99
• current hits - $1.29

$1.29 was the amount Apple originally priced iTunes Plus (DRM-less) music at. However, iTunes pricing has been stable at $0.99 for most music since iTunes launched; it's about time for inflation to hit anyway.

This change will eliminate the advantage Wal-Mart, Amazon MP3 and others have in terms of DRM-free music. For catalog music, iTunes would even have a price advantage, though for new songs, it will be at a disadvantage.

However, I've always said that iTunes on the desktop is what makes iTunes the store the most popular music retailer. The fact that you need to use iTunes anyway, and it stuffs a store in your face every time you sync music, just makes it the most obvious place to buy things.

How will other music retailers respond? If they're smart, they already have a plan.