Report Overview

Apple drops DRM

Major record labels will allow iTunes to sell all its music stripped of digital rights management (DRM), removing a barrier to digital music buying, while iTunes will introduce in April the tiered pricing the industry wants.

We expect no real bounce in demand, however, as Apple’s DRM was not a restriction for iTunes customers as most owned iPods, the dominant music player in a market which is almost fully matured – we expect few iPod customers to pay to upgrade their libraries to DRM-free.

News of peace breaking out between iTunes and the recorded music industry was overshadowed by reports of the continued steep decline in CD volumes sold in the US market, down almost by one fifth in 2008 from 2007, with digital increases again failing to offset the decline.