By now, most of you out there have heard about the deal between Apple and EMI. Apple announced earlier this week that it plans to sell DRM-free music from EMI, one of the big four major labels, through iTunes.
No one will question that this a big deal. For years, the RIAA and the major labels have insisted that Digital Rights Management was an absolute necessity for selling music online, even though there was zero evidence that this sort of copy protection ever did more than treat paying customers like criminals. The fact that any of the major labels agreed to this is a pretty big step.
It's only one step, though, and the way this step was taken leaves me, like the boys at Engadget, just a bit cynical.
For starters, this move shouldn't absolve the RIAA and its labels of shady business tactics. EMI is not rushing to leave that organization, which still thinks suing music fans is a worthwhile business practice. I'm pretty sure those labels have no plans to work with podcasters like me anytime soon, either.
Moreover, we should look at the way this deal benefits Apple. Steve Jobs spent years telling the RIAA labels that he wasn't going to raise the price of music sold through iTunes. Singles would stay at $0.99. This deal changes that. DRM-free tracks are now $1.29. Surely, this was a concession Jobs had to make to convince EMI to do the deal. The labels get to charge more, Jobs appeases the EU antitrust probe by showing that Apple is making inroads toward removing DRM, listeners get better audio quality, and everyone makes more money.
Except, of course, the EMI artists themselves. If they're lucky, they'll get an extra penny per sale. This is why signing with a major label is a bad idea.
Of course, if you're an indie label or unsigned artist, selling DRM-free music through iTunes seems like a great idea. However, the way Jobs set up this deal, it would appear that the only way for an indie artist to sell DRM-free tracks is to sell “premium” tracks. You'll still have 128 Kbps AAC files wrapped in DRM for $0.99, but you'll also have 256 Kbps AAC files with no DRM for $1.29. This is sure to be a standard for all artists selling through iTunes.
I have a really problem with the idea that “DRM-free” is equal to “premium.” After all, eMusic sells DRM-free music for about $0.33 a song. The only reason Apple is doing it this way is to appease the big labels that want to charge more per song. That's all part of the deal, though. If you want to sell DRM-free music, you'll have to charge listeners $1.29 per song. You'll also have to sell music in AAC format. If you want MP3, you'll have to go through eMusic.
Here's one more thing that nobody's really talking about. These premium downloads will be twice as big as the regular iTunes downloads. Suddenly, that old 20GB iPod and that 2GB iPod nano don't seem quite so spacious, do they? Surely, iPod lovers will want to upgrade to newer models with a lot more storage space for these larger files. Apple probably has a slew of 40GB iPods and 8GB nanos in the pipeline just for this…
Anyway, the real question now is how soon Apple will allow indie labels or artists who got into the iTunes Music Store through CD Baby, Tunecore or The Orchard to sell DRM-free music. Sure, independent artists have other ways of selling DRM-free music, but none of them are as dominant in the marketplace as iTunes. Apple has done a pretty decent job of letting the indies play in their sandbox in the past. They ought to be allowed to play now, too.