The Good: iTunes is ditching DRM and adopting variable pricing. Soon you will be able to buy high quality, DRM-free music from all the major record labels through iTunes. As a fan of oldies and somewhat obscure music, the variable pricing scheme will likely work in my favor.
The Bad: I have about 1,000 songs in my library that are hobbled by iTunes DRM. If I want to upgrade these tracks it will cost me an additional $0.30 a song. Since I bought Are You Experienced? two years ago it will cost me $5.10 to upgrade it; add that to the $9.99 I originally paid, and that comes to $15.09. That is just about what the CD would cost me at Amazon or Best Buy. If I bought the same album today on iTunes it would cost me $11.99.
The Ugly: I cannot selectively upgrade my library. It is all or none! (See the iTunes Plus FAQ). I have the choice of upgrading 1,000 tracks for $300, or zero tracks for nothing. Update: This is no longer the case — iTunes now allows you to upgrade by individual album or track.
Here is my prediction: As the insanity that was DRM fades into the mists of time in year or two, Apple will announce that they are no longer supporting the old copy-protected tracks. New versions of iTunes and the iPod will no longer play them. At that point I suspect that they will offer a better deal for upgrading.
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I think the final point of your prediction is unlikely. The end game will be that they will force you to pay thousand(s) to upgrade your library, or lose it altogether.
It’s a rip off, that’s for sure. I’m sure they have lost some customers to Amazon, I wonder how many will go back to iTunes after having to pay for an upgrade to update their libraries. I’ll use iTunes to search and buy from Amazon.
On a side note, check out advantageousmp3.com, they have a script that will capture the album or artist you are looking at in the iTunes store and open a browser and navigate you to the same thing on Amazon’s website.