Finally: iTunes Store Goes DRM-Free, 99-Cents Going Variable

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Some rumors do come true.

On Tuesday, Apple announced that its iTunes Store would soon sell DRM-free content from all four major labels, the end of a protracted standoff.  That means greater content flexibility for users, though it does not mean MP3s – instead, Apple will be offering unprotected AAC downloads, encoded at 256 kbps.  Apple prefers the AAC format for its sound fidelity and size, though the MP3 offers a greater degree of compatibility.

On the pricing side, the 99-cent, uniform tag will splinter into three price points – 69-cents, 99-cents, and $1.29.  Albums will mostly remain at $9.99.  According to initial information, the newer price points will largely be dictated by major labels Sony Music Entertainment, Warner Music Group, Universal Music Group, and EMI, at least through wholesale pricing decisions.

Additionally, Apple announced that all downloads will be available through 3G, instead of just online or through WiFi connections.  That means over-the-air mobile downloads to the iPhone, a new level of content flexibility for users.

In terms of timetable, the DRM-free content and 3G delivery are available immediately.  Variable pricing will happen in April.

The DRM-free shift sounds great for new buyers, but what about those carrying substantial, DRM-protected collections?  Unfortunately, those users will be forced to pay to upgrade, specifically 30 cents per track for the “iTunes Plus” privilege.  Albums will require a payment of 30 percent of the new, premium album price.

The changes were announced Tuesday at the MacWorld Conference & Expo in San Francisco.  But instead of coming from Steve Jobs, Apple senior vice president Phil Schiller delivered the news.  Jobs took a break from the customary keynote, and Apple is now splitting with Macworld.