jmincey said:
Given the continued market dominance of iTunes, I'm surprised that Jobs has chosen to bow to the demands of the record labels for multi-tiered pricing. Granted the labels were holding the DRM card over Jobs, but then when you look at the raw numbers, the iTunes Store didn't seem to suffer much vis-a-vis DRM-free offerings from Amazon et. al.
I wonder if this will further embolden the record labels now that Apple will not seem so invincible in the music arena.
In any event, maybe this particular decision will be win-win for all parties concerned -- consumers included.
Jeff Mincey
We don't know the whole back story here. Perhaps Apple has some data showing that they have actually lost some sales to the likes of Amazon MP3 or others. Its not impossible. In fact, I've seen some scenarios where Amazon got a sale and Apple did not.
One small example: where I work, we have a department that gives bi-yearly Keynote presentations to other departments, using a lot of imagery and music to convey the coming trends for the company's offerings. I'm often asked to help out with the music editing portion, trimming tracks down to a certain length to fit each section of the presentation. More and more the department members are turning to online music sources for files. Unfortunately, iTunes Store is generally out of the running because you can't open and edit the tracks. They're locked when trying to access them from almost any music editing app I've tried. So, Amazon gets the sales of those tracks. While this example is only a drop in the bucket, I'm sure we aren't the only ones wanting to use music tracks in ways that the DRM doesn't allow.
It seems to me Apple gave in to stay competitive, but if anything, it took a while to ensure that "most" tracks would actually end up being cheaper ($0.69) than they were before. That was probably the compromise: You can have variable pricing, as long as it ends up staying low priced for most tracks.