Either Steve Jobs is a master tactician, or this is the best instance of being at the right place, at the right time, for Apple.
The Apple/EMI deal announced today stipulates that there’ll be new tracks available in the iTunes catalog with no DRM, and twice the bitrate. How anyone would even consider purchasing music encoded at 128kbps had always baffled me. Not everything is glowing, however – that lack of DRM will come at a 30% price increase per track.
Now the consumer rights activists would argue that the removal of DRM should not equate in a price rise. If anything, it reduces the cost by removing the infrastructure necessary to support the DRM platform. To satisfy them, Apple has doubled the bitrate of the songs – inherently increasing their value at virtually no cost. That said, that price hike is only for the single tracks. The cost of an album on iTunes will not change.
EMI wins by getting increased royalty payments. Furthermore, by keeping the cheaper DRMed music in the iTunes catalog, people won’t be turned off by the higher price point of the DRM-less music. They can just go for the restrictive cheaper alternative.
Apple wins because they’re shedding the recent momentum in Europe against the lock-in between the iTunes and the iPod due to their DRM platform. Both Apple and EMI will face little opposition from consumer rights activists for having raised the price, because of Apple’s choice to double the bitrate.
The music listener wins because the music they get is not only at much better quality, but they can now make it work everywhere they want to.
The only ones that might risk getting hurt are proponents of DRM technologies. If EMI becomes succesful on iTunes, it might undermine the case for the use of DRM. Nevertheless, it doesn’t affect the legitimacy of laws surrounding legislative protection of DRM. Those that promote WIPO treaty ratification in Canada won’t lose from this announcement.
This is a positive all around.