Apple Cuts Copy Protection and Prices on iTunes

Apple Inc. is cutting the price of some songs in its market-leading iTunes online store to as little as 69 cents and plans to make every track available without copy protection.

Phil Schiller, senior vice-president of worldwide product marketing for Apple, delivers his keynote address Tuesday, Jan. 6, 2009, at the Macworld Conference and Expo in San Francisco. (AP Photo/Ben Margot)

(AP)

In Apple's final appearance at the Macworld trade show, Apple's top marketing executive, Philip Schiller, said Tuesday that iTunes song prices will come in three tiers: 69 cents, 99 cents and $1.29. Record companies will choose the prices, which marks a significant change, since Apple previously made all songs sell for 99 cents.

Apple gave the record labels that flexibility on pricing as it got them to agree to sell all songs free of "digital rights management," or DRM, technology that limits people's ability to copy songs or move them to multiple computers. Apple had been offering a limited selection of songs without DRM, but by the end of this quarter, the company said, all 10 million songs in its library will be available that way.

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While iTunes is the most popular digital music store, others have been faster to offer more songs without copy protection. Amazon.com Inc. started selling DRM-free music downloads in 2007 and swayed all the major labels to sign on in less than a year.

Schiller also announced that iPhone 3G users will be able to buy songs from the iTunes store using the cellular data network. Previously, iPhone users could shop for tunes when connected to a Wi-Fi hot spot.

The iTunes changes marked the highlights of Schiller's run as a stand-in for CEO Steve Jobs, who used to make Macworld the site for some of Apple's biggest product unveilings, such as the iPhone. Apple said last month that Jobs would not address the throngs this time because the company plans to pull out of Macworld next year.

Apple shares slipped $1.56, or 1.7 percent, to close at $93.02.

Schiller got a warm welcome from the attendees — who packed the convention hall despite the pall cast over the industry by the economic downturn — especially at the start of his talk, when he thanked them for showing up despite Jobs' notable absence. He ran seamlessly through his 90-minute presentation, getting applause and oohs from the audience, varying little from the format of slides and demos established by Jobs. And like Jobs, he gushed about Apple's products being the best in the world.