iTunes abandons flat-rate pricing and DRM protection

Apple’s decision to switch to variable pricing for iTunes tracks has led to general price rises among its competitors, though there’s something of a price war.

From yesterday, iTunes tracks no longer costs a flat rate of 99c. That’s now the standard price for most recent songs, but older tracks are down to 69c, while the most popular new releases are $1.29.

The music industry has been calling for such a variation for some time, believing that the flat-rate system was deterring people from buying older songs, while the latest hits were underpriced and thus throwing away potential revenue. Apple used to have enough clout to resist this, but competition from the likes of Amazon has left it more at the mercy of the music publishers.

Immediately following the iTunes price changes, both Amazon and Wal-Mart changed their pricing structures, which were already on a variable basis. The two firms have each upped their most expensive price level with Amazon matching iTunes’ $1.29 and Wal-Mart priced five cents cheaper.

However, Amazon has kept several of the most popular songs at 99c, meaning that although it may well be as or more expensive as iTunes overall, it will come off well in many song-for-song comparisons and give the impression that the entire service is cheaper.

Yesterday also marked the end of digital rights management with Apple following through on a promise to drop the copy protection method which many buyers felt unfairly restricted their ability to use the music they had paid for.