Apple cuts price of DRM-free tracks to 99 cents

Apple Inc. confirmed today that it is reducing the price of all songs on its iTunes Plus, the unit of Apple's online music store that features songs without digital rights management (DRM), to 99 cents from $1.29, turning the earlier rumors about a possible price cut of DRM-free tracks on its iTunes store into reality.

After the price cut, Apple's DRM-free music pricing comes closer to those offered by Amazon.com Inc., Wal-Mart Stores Inc. and other rivals in online music, who are selling DRM-free music for 99 cents or lower.

The Cupertino, California- based Apple charges the same amount, i.e. 99 cents for songs encoded with its FairPlay DRM technology.

Starting today, Apple's music catalog with anti-copying software, which is largely made up of artists from EMI, will be available for only 99 cents, Apple CEO Steve Jobs announced. He also said that the company has also already begun adding new DRM-free tracks from independent recording companies at the similar cost per song.

"iTunes Plus has been incredibly popular with our customers and now we're making it available at an even more affordable price," said Apple spokesperson, Tom Neumayr. "We're adding over two million tracks from key independent labels in addition to EMI's digital catalog and look forward to even more labels and artists making their music available on iTunes Plus."

Introduced in May, the “iTunes Plus” is an unprecedented iTunes service that allows customers to buy thousands of digital tracks without copy protection, enabling them to listen to the song, for the first time, directly on portable MP3 players, including Microsoft's Zune.

Apple's iTunes store was introduced in 2003 for commercial music downloads and it became instantly popular with online customers. Apple had started with a library of only 200,000 songs and today it has over 6 million songs in its pocket.

The EMI music catalog contains singles and albums from Coldplay, The Rolling Stones, Norah Jones, Frank Sinatra, Joss Stone, Pink Floyd, John Coltrane and more than a dozen of Paul McCartney's classic albums.

The price cut would no way affect the quality of DRM-free songs. The tracks will continue featuring the high-quality 256 kbps AAC encoding.

The price drop comes after the online heavyweight Amazon.com recently entered the domain of Apple in online music store. The Internet retailer last month launched an online music store that features songs without digital rights management (DRM) software, a move that likely poses a direct challenge to iTunes for online music dominance.

Amazon, which currently offers Earth's Biggest Selection, launched on September, 25, a public beta of "Amazon MP3," a new digital music download store that provides DRM-free downloads of over 2 million songs from 180,000 artists and 20,000 labels.

Amazon has priced most of Amazon MP3's songs between $0.89 and $0.99. More than half songs of the catalogue are priced at $0.89, a full $0.40 less than iTunes Plus songs, Amazon at the time claimed. The company also guarantees that its top 100 best sellers will remain at 89 cents.

The iPod/Mac maker's iTunes Music store boasts of more than 70 percent of digital music sales in the United States. To date, Apple has sold nearly 2.5 billion songs via its online music store, of which nearly 45 percent were purchased as albums.

Apple’s music store features the world's largest catalog with more than six million songs, 350 television shows and over 400 movies. The iTunes Store has sold over 50 million TV shows and over 1.3 million movies, making it the world's most popular online music, TV and movie store.

Movies purchased and downloaded from the iTunes Store can be viewed on a computer, fifth generation iPod and, soon on Apple TV. Most of them are priced at US$9.99 each. Movies downloaded from the iTunes Store are downloaded in near-DVD quality at a resolution of 640x480.

In comparison, Amazon MP3 store sells most albums for $5.99 to $9.99, again a bit cheaper than albums in the iTunes Store. Wal-Mart's online store sells most of MP3 songs for 94 cents a track.