 Lost in the verbiage over Apple’s decision to expand the number of DRM-free songs on iTunes was a fee some are calling Apple’s ‘music tax’ potentially worth $1.8 billion to Cupertino. iTunes users will need to pay $0.30 per track ($0.60 per video and 30 percent of the price of an album) to use Apple’s one-click conversion to DRM-free listening pleasure. While offering copy-protection free iTunes songs is viewed as a ‘win’ for consumers, it may also further enrich Apple’s coffers. Erick Schonfeld of TechCrunch estimates Apple would earn $1.8 billion if each of the 9 billion iTunes sales were converted to non-DRM. “That’s a music tax, plain and simple,” wrote Schonfeld. Of course, the fee doesn’t apply to songs you burnt from your own CDs or obtained elsewhere - only from Apple. Still, the conversion could amount to a significant sum both in money and time, another writer discovered. Fortune’s Philip Elmer-DeWitt wrote it cost $50.60 to convert 231 songs he’d originally purchased from Apple. The conversion to the DRM-free iTunes Plus took more than seven hours, he said. In related news, Apple’s adoption of a three-tiered pricing formula to entice music label’s agreement on the DRM issue may actually cost publishers, analyst firm Needham & Co. said Tuesday. Offering a higher price for more popular songs may push more music lovers to file-sharing, while the lower $0.69 per track price could force publishers to sell 40 percent more songs just to break even. |
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