Apple To Drop DRM, Hike Prices For Major-Label Songs?

This story was written by Robert Andrews.
The hot rumor for the biggest announcement of Apple's final MacWorld Expo today says DRM protection will be dropped from iTunes Store music downloads. EMI already began offering higher-fidelity, DRM-free AAC files back in May 2007, after Steve Jobs said Apple (NSDQ: AAPL) would "embrace (DRM-free) in a heartbeat if the big four would license their music (that way) ... because DRMs haven't worked, and may never work, to halt music piracy".

Now product marketing VP Phil Schiller, taking Jobs' traditional keynote spot, will announce the addition of Warner, Universal and Sony (NYSE: SNE) Music Entertainment at San Francisco's Moscone Center at 9am PST, CNET reports from two anonymous sources. Dropping DRM on Apple's favored AAC file format will not be as significant as switching to MP3, which is more commonly associated with DRM-free and compatible with more devices, but it would assuage the regulatory concerns of France, Norway and the European Commission, which have each called for Apple to allow users more flexibility.

Apple and the labels have also struck an arrangement to bring over-the-air mobile downloads to iPhone, which currently only allows purchases over WiFi, says the site, which also claims iTunes will introduce three new pricing tiers for older, recent and hit songs. It could be that the quid-pro-quo Apple is offering to drop DRM on major-label repertoire is allowing the labels to hike per-track prices beyond $0.99. Forrester Research music analyst Mark Mulligan told me: "DRM is dead, long live DRM!  This is overdue and needed to differentiate premium from subsidized services like Nokia's Comes With Music. The more you pay, the less DRM you get."

By Robert Andrews