Jobs Talks iTunes Pricing, DRM with Labels

Last year, Steve Jobs and the major music labels locked horns over music prices on iTunes. The labels wanted the option of variable (read: higher) prices, while Jobs insisted that uniform prices at the magic just-below-a-dollar number was key to iTunes' success. Jobs got his way, but they agreed to meet again in a year's time for a new round of talks. Which would be, oh, now.

But a lot's happened in a year. European discontent with Apple's dominance in the digital music market peaked with Norway declaring iTunes illegal, which prompted Jobs to write his "Thoughts on Music" open letter, in which he pointed the finger at the music industry. Meanwhile, the music industry saw CD sales continuing to decline, and one of their own broke ranks to offer DRM-free music online, which goes into effect some time this month.

So the thought is that as Apple and the Big Four head back to the negotiating table, some compromise might be required. One thought is that Apple will take their cue from the EMI deal and offer the labels the option to raise prices. The catch: they'd have to drop the DRM. The question is, will a 30% price increase be enough to entice the labels from entering heretofore forbidden territory? How much does EMI have to make before, say, Warner -- whose CEO decried the idea of a DRM-free universe as one "completely without logic or merit" -- decides to loosen restrictions?

Most important of all: are people willing to pay extra for better quality audio and no DRM? Services like MusicGiants already offer high-quality audio tracks for $1.29, and eMusic only sells DRM-free MP3s, but neither rakes in money like iTunes (though eMusic is the #2 online music store). Come to think of it, eMusic's pricing structure actually gives consumers better quality for less -- a basic monthly subscription works out to about 33 cents per song.

Would it be worth it to you to pay extra for a high-quality, DRM-free Macy Gray track? Or is the 99-cent price enough to make you endure DRM?