Tolerating Digital Rights Management

Apple made a huge announcement today: it is drastically overhauling its popular iTunes service. First, the pricing of songs will change from the flat $0.99/song to three price points $0.69, $0.99, and $1.29--where music labels get to chose which price to charge their songs at. Second, they will begin a process of totally removing DRM from all their songs. Finally, they will allow iPhone users to download directly over their 3G network.

There are a few interesting implications of the above. First off, there will be a direct (yet subtle) price variance for song buyers. Furthermore, the prices are set by the music labels and not by iTunes themselves, which encourages competition. Up until now, MP3s have been valued very consistently at $1/song. Will they be encouraged to drop the price of a particular artist by $0.30/song in hopes of they could take market share away from a competitor? Or conversely, will they raise the price $0.30/song and assume loyal fans will pay a premium? Even though I am leery of the latter, I do find the prospect of a more free market for MP3s mildly enticing.

Second, and probably of greater consequence, is the fact iTunes is dropping Digital Rights Management. As a rule, I despise DRM and oppose its application almost entirely. Besides the principle that consumers are basically being forced to purchase features that hinder the use of the product, DRM locks consumers into specific hardware/services. For example, I cannot (legally) play any of my current iTunes purchases on anything other than an Apple iPod/iPhone or a computer with the iTunes software installed. If I want to switch to a Microsoft Zone (which would be a bad idea, but I digress), my purchases would be nontransferable. If I want to upgrade to Windows 7 and iTunes doesn't work for some unknown reason, my purchases will be nontransferable. In effect, there is coerced customer loyalty and planned obsolesce in all DRM-locked purchases. In fact, I would argue that it's not so much of a purchase as it is a lease. Now don't get me wrong--when I bought episodes of "Heroes" to download to my iPod and watch on my plane trip later this month, I did so accepting that their usage would be highly constrained. I decided those were worth their $2/episode price even if I only watched them once or twice. For music, though, I (as well as most people, I'd presume) have a much greater expectation of what they should get for a $1/song.

For bonus happy-fun DRM-bashing, check out Defective By Design's website.