Apple’s $1.8 billion iTunes tax

You gotta hand it to Apple. They really do know how to separate money from people’s wallets. Check this bit of chicanery around their new DRM-free music upgrade plan:

Anyone who wants to upgrade their entire existing iTunes Library to DRM-free versions of the same songs, can conveniently do so with one click. But it is going to cost you 30 cents a track to do so. That’s right, you have to pay again for songs you already bought. Let’s see, 6 billion songs X 30 cents = $1.8 billion in potential upgrade fees. That’s a music tax, plain and simple. No wonder the music companies finally relented.

And by the way, if you do want to upgrade your collection of lackluster Protected AAC tracks to DRM-free AAC, you have to do the whole collection. You can’t pick and choose.

I’ve said it before, and I’ll say it again: Amassing a collection of iTunes-bought Protected AAC tracks is like failing an intelligence test. This guy from CNN would have to pay almost $60 to “upgrade” the music he already paid for. What a chump.

Discuss this Article 103

adamb1000
on Jan 8, 2009
The iTunes Tax? Pretty sure most of the 30 cents will go to the music labels...
mikegalos@msn.com
on Jan 8, 2009
adamb1000 And you base that assumption on what? Steve Jobs' long history of treating his customers well? Apple's well known penchant for charging their customers less than the maximum the market will bear?
Lindy
on Jan 8, 2009
Its a choice not a gun to your head. If your music is contained to your computer and iPod then why even do it. I think some comparisons to how this has been done by others if it has would be good.
johnbaxter
on Jan 8, 2009
The $0.30 upgrade price for taking a song to iTunes Plus made sense when it was created: you had a $0.99 song and wanted to change it to a $1.29 song (without DRM and with higher quality. It certainly doesn't make sense now for songs that are (going to be) $0.99 in the improved format. And I doubt we'll ever see a $0.30 cent rebate for songs that are upgraded to the new improved format and the new improved $0.69 price. But I plan to wait until Apple says that all the changes that are going to be made have been made (they haven't said that: they've said something like "by April"). Then I'll look at upgrading the songs (and probably will). We do live in an instant gratification world, don't we? And, of course, it may turn out that it will still cost $0.30 to upgrade when the changes are all done, regardless of the new price of each song. In which case annoyance is justified. And yes, I can afford to be relaxed about this: I don't have a large collection of iTunes songs, and I stopped buying music in any form except direct from the few artists I know (or the nice locally owned record store that buys the CDs directly from one of those artists). I'm really not happy with the music industry (including Apple) (and most of today's new "music" would not be accepted here if it came with a $10 bill attached). I relented recently: I did buy a Zune Pass (3 months), and will no doubt convert the 10 songs per month to purchases. Whether I renew or not is an open question to be answered in the Spring.
DarrenRichie
on Jan 8, 2009
Only ever bought 1 album on itunes as it was alot cheaper to get it on there, but I have never bought any since. I went into itunes yesterday and I was able to "upgrade" this album for an extra £1.98 (UK). I could have bought the CD for the amount it costs in total. Anyone taking them up on this is a fool (cue: robertsjoe) "Pretty sure most of the 30 cents will go to the music labels..." And how much of that goes to the musicians? Minimal I reckon.
fzanes
on Jan 8, 2009
It's so funny how the writer of that CNN article trys to justify this by saying this is cheaper than what we all went through when we went from tapes to CDs. You can almost see him mentally trying to fight off the Apple fanboy urge to just buy into anything they sell and come up with a way to justify spending the $56.70 to upgrade ALL his files. You just KNOW he can't win that fight and he will sadly break down and just pay his Apple tax like a good little brainwashed sheep. Thank God for the IRiver and the Zune…
AlanRR
on Jan 8, 2009
This is just more Windows whining. Apple will soon wipe the floor with MS thanks to their forthcoming brilliant innovations such as this http://is.gd/eEka :-)
Ocean
on Jan 8, 2009
I thought I read that the labels made that necessary. Plus...someone has to pay for the bandwidth of re-downloading all those songs.
darkmax
on Jan 8, 2009
Isn't buying a DRM-removal software cheaper than paying to have all your collections made DRM-free? This is BS from Apple. Fortunately I saw through their marketing ploy a long time ago.
Ocean
on Jan 8, 2009
And Paul lies again. Why did Paul leave this line out? From the same website he quoted from: >>But it looks like **the labels** prevailed in sticking it to consumers on one last point. Anyone who wants to upgrade their entire existing iTunes Library to DRM-free versions of the same songs, can conveniently do so with one click. But it is going to cost you 30 cents a track to do so.<<
kalewallace
on Jan 8, 2009
Solution: Amazon.com .mp3s... Done. DRM'd-AACs = Stupidity
Ocean
on Jan 8, 2009
BTW, I'm going to re-post that every time someone blames Apple for this.
Dude1313
on Jan 8, 2009
Or burn to disk and remove DRM...
danieldecker
on Jan 8, 2009
If you DON'T think this is at the insistence of the labels, then you are just proving your jackassery. Jesus. Paul, Mike, weedmonk and the rest could even find a way to blame Apple for the war between Israel and Hamas. Do you honestly think that a company that held out for so long to avoid variable pricing, would adopt the scheme merely to dick it's customers? By God Apple better have all the kinks worked out on day one, while MS can take 18 mos to get Vista right.? Surely piecemeal upgrading is coming, and if it doesn't? Big frickin' whoop. Upgrade or don't, it's your choice, just like every other chance to spend YOUR money. Me, I'm not gonna, because I have never felt "restricted" by DRM.
boyreinvented
on Jan 8, 2009
OK, for a long time I have just watched as Paul constantly bemoans Apple and its users, but this blog post finally made me sign up to reply to Paul's blog. This sort of thing really makes me mad. Copy and pasting selective text from other websites is not something a professional in any field should do. It just makes you look like a fool. In this case, it is no doubt the music companies themselves that will get this so called tax. Let's also add that no one is forcing you to press that upgrade button. Also, Apple deserves praise for finally convincing the music industry to let them sell without DRM. This sort of post looks desperate. Attacking Apple for the smallest thin even when that thing is out of their control. Pathetic.
Ocean
on Jan 8, 2009
>>Do you honestly think that a company that held out for so long to avoid variable pricing, would adopt the scheme merely to *** it's customers?<< This. >>This sort of post looks desperate. << Double this.
kalewallace
on Jan 8, 2009
@danieldecker: "Do you honestly think that a company that held out for so long to avoid variable pricing, would adopt the scheme merely to *** it's customers?" Doesn't seem like a far stretch for a company who charges $129 for 10.x OS upgrades, $79 for iLife upgrades, $0.99 for Keynote Remote app, and a special $9.99 upgrade to iLife '09 if you buy a Mac now.... What a steal...
Lindy
on Jan 8, 2009
Paul www.rif.org Ocean pretty much just handed your @$$ to you:)
weedmonk
on Jan 8, 2009
Such is living life with an iLobotomy...
tayme
on Jan 8, 2009
My solution...keep my zune pass at $15/month. I can plug the zune into all of my home and car systems and listen anywhere...plus I get 10 songs per month for free. Even DRM free ones. I like it. But, again...if somebody wants to spend the money to do the upgrade...let them. That is their right. --tayme
daProject
on Jan 8, 2009
So Apple are supposed to fund the download of 6 billion music tracks. 8MB * 6bn = 48,000 TBs of bandwidth. Apple should pay that? Why?
chipwinter
on Jan 8, 2009
I have about 300 songs that I bought from the iTunes store for 99 cents. They have DRM and are 128K AAC. I knew that when I bought them, and I've enjoyed having them. iTunes allows me to keep them under the original agreement, and that seems fair. Apple now offers me the option of upgrading my songs to 256K AAC and remove the DRM for 30 cents each. That seems reasonable to me. But please keep harping about how awful and sneaky this is. I just don't see it.
mikegalos@msn.com
on Jan 8, 2009
It's absolutely hilarious to watch all the Apple fans tripping over themselves to say "It can't be Apple screwing us over. It must be the "Evil Record Industry(R)", or the RIAA, or the Illuminati, or Martians or, or, or..." Apple's customers bought a license from Apple for a product that's become non-competitive. Apple is offering their customers an upgrade to that product to make it competitive with Microsoft and Amazon and is charging their loyal customers a high fee with onerously few options to not be left behind. That sounds exactly like Apple's normal business practices. And all of you are fighting for the chance to tell the world how lucky you are to have Apple treat you badly. That sounds exactly like Apple Fan's normal business practices. I'm sure we'll see exactly the same discussion when Apple announces the pricing for Snow Leopard.
edgesmash
on Jan 8, 2009
@boyreinvented: Apple was not the first vendor to convince the labels to sell DRM-free music. Amazon's been doing that for a while. @daProject: Apple could've provided a conversion tool that would have cost them a fraction of the cost of that bandwidth. This is definitely just another way Apple loves to grab cash from its happy customers.
boyreinvented
on Jan 8, 2009
Mike. This isn't a case of fanboys making things up. It's the truth. What's funny is the Microsoft fanboys like yourself that are desperately trying to use this to hit Apple fanboys with. The reason that Apple didn't offer DRM free music was that the record companies were using DRM free music to try and boost sales at other outlets. They hate Apple almost as much as you do and were desperately trying to get people buying elsewhere. Well that's failed, they've given up and finally let Apple have it's way. Apple is not a perfect company by a long way, but honestly, this is one time when attacking it, just makes you look silly. Save your rants for one of those days when Apple really does something really bad. This certainly isn't one of them.
boyreinvented
on Jan 8, 2009
Mike. This isn't a case of fanboys making things up. It's the truth. What's funny is the Microsoft fanboys like yourself that are desperately trying to use this to hit Apple fanboys with. The reason that Apple didn't offer DRM free music was that the record companies were using DRM free music to try and boost sales at other outlets. They hate Apple almost as much as you do and were desperately trying to get people buying elsewhere. Well that's failed, they've given up and finally let Apple have it's way. Apple is not a perfect company by a long way, but honestly, this is one time when attacking it, just makes you look silly. Save your rants for one of those days when Apple really does something really bad. This certainly isn't one of them.
mikegalos@msn.com
on Jan 8, 2009
boyreinvented Well, now that you've declared it to be "the truth" who could possibly disagree.
mikegalos@msn.com
on Jan 8, 2009
edgesmash Actually, Apple doesn't even need to do that much. All they'd have to do is change the pointers in the database (the one that keeps the records of what customers have licenses to what media) to point to the non-DRM, higher quality versions and tell customers that the next time they refresh any tracks they own, they'd be getting the new, higher quality, non-DRM version. No massive download bill, little to no changes to client code, trivial changes to the servers, savings from not having to keep both formats stored on Apple's server farms.
boyreinvented
on Jan 8, 2009
@edgesmith: Apple has wanted DRM free music for a long time. Remember Steves' letter? The thing is, it has taken this long for the industry to bow down to the pressure from them. They wanted other music outlets, but fundamentally, people like iTunes as clearly that is where people are buying them from. I never said Apple were the first to offer DRM, but they deserve credit for working to get it none the less.
tayme
on Jan 8, 2009
I find it funny to see how mikegalos and others here, including Paul, rush to say how evil Apple is at every opportunity. Come on people...if people are happy with thier iPod or iPhone how is that harming you? I just don't get this and it gets sillier every day. Both sides are equally guilty of this. Look at robertsjoe and others posting thier juvenile BS whenever somebody says something positive about Microsoft. At least its entertaining, I guess...but even that is starting to fade. All of you that have either flavor of the company provided bliners on here are very simple minded individuals. --tayme
mikegalos@msn.com
on Jan 8, 2009
boyreinvented Yes. Steve published a letter. That means it must be true. He'd NEVER do anything that might be deceptive.
AlanRR
on Jan 8, 2009
I don't think it is the Music Labels that are giving in to Apple but the reverse. The Music L ables have been happy to sell DRM music for quite some time (look at Amazon). It was Apple refusing to allow variable pricing that was preventing DRM music hitting iTunes. Apple have now caved in on that so iTunes can have DRM free music in order to allow them to tackle Amazon's growing market share.
tayme
on Jan 8, 2009
@mikegalos - Perfect example of my previous post... --tayme
dittobait
on Jan 8, 2009
I was wondering what all the MS water-boys on this site thought when MS decided that people that bought music for Plays-For-Sure music players were told they would have to repurchase there music in order to have that music play on a Zune? http://www.engadget.com/2007/12/12/microsoft-rebrands-playsforsure-to-ce... http://arstechnica.com/journals/microsoft.ars/2006/11/30/6133 http://www.google.com/search?client=safari&rls=en-us&q=plays+for+sure+zu... I guess getting screwed is a relative term. Talk about zealots, fanboys & delusional hacks.
Lindy
on Jan 8, 2009
@Mike lol, you have the worst "holly than though" attitude on this site. Can you not READ what Ocean pointed out? (you will never answer that question why did I even ask). You should start your own blog Mike www.thedailytool.com. Plaster that lovely mug all over it.
boyreinvented
on Jan 8, 2009
@Mike: Listen to yourself! It's hilarious and totally tragic. At the end of the day, Apple is a company. A corporate entity not a charity. Do you honestly think that if things were reversed, Microsoft would be letting people upgrade their libraries for free. If you do, well you must be living in a dream world! @Alan: You don't get it at all do you?! The music companies have refused to let Apple sell DRM free music because they wanted to encourage sales of DRM free music from elsewhere. They hate that so many people use iTunes, because they hate someone else having control over them. This isn't some conspiracy. I'm already starting to wonder if you guys are just fanboys or total whackjobs and I've only been posting for a day.
Lindy
on Jan 8, 2009
@AlanRR Amazon was not gaining on iTunes. After MacWorld its doubtful they ever will. http://mediamemo.allthingsd.com/20081215/amazons-mp3-store-one-year-in-n...
mikegalos@msn.com
on Jan 8, 2009
boy You're the one claiming that Apple is totally altruistic and that evil external forces are making them have to do this bad thing that they'd otherwise never want to do. And, of course, that we should believe everything you say because it's "the truth".
dittobait
on Jan 8, 2009
The DRM war in music is over...Apple won. MS on the other hand is now stuck competing with players that they once partnered with. Apple bought about this change & anyone that doesn't realize this can not think straight. I don't like the 30 cent charge. So we'll see how that goes...it's still early. AAC(MPEG 4) is a better format than MP3 & WMA is dead (thank goodness). Now anyone can make a music player & buy music from any place they choose & not have to be beholden to any corporation. Thanks to Apple. MS could never compete on a level playing field...now they will have to & they are behind. It's a win win for the hardware makers out there. MS does not control this industry that's a huge plus.
PeyloW
on Jan 8, 2009
Last April iTunes music store surpassed WalNartand became the biggest seller of music, online or otherwise. It is still gaining marketshare and sale volume. @mikegalos: Care to explain how iTunes Music Store can be defined as "non-competative"? Looks like it's busines model work pretty fine to me.
daveinla
on Jan 8, 2009
"Amassing a collection of iTunes-bought Protected AAC tracks is like failing an intelligence test" Actually most people who have a salary and an iPod + a computer and who know s**t about aac and mp3 (people >25 who are not geeks) will purchase their songs on itunes without having a clue what format their songs are and what aac is. I know a bunch of them, they know the price and the friendliness of the store interface and are happy about it. That don't make them idiots.
daveinla
on Jan 8, 2009
Actually I tell them to buy songs from Amazon after browsing on iTunes.
BrightrevCarl
on Jan 8, 2009
"Amassing a collection of iTunes-bought Protected AAC tracks is like failing an intelligence test." It's not just Apple and it isn't just iTunes. Amassing a collection of ANY restricted music tracks is a mistake.
boyreinvented
on Jan 8, 2009
@Mike: I don't know what planet you live on but here on Earth those 'evil external forces' certainly exist in the form of record companies and their RIAA. These people sue the less fortunate for vast sums of money, so let's not pretend they are all nice and lovely and don't care about money. Oh, I used the word "truth" and you are never going to let me forget it, but all the time you just use that instead of creating a real argument, you'll just look petty and pathetic. I certainly don't think Apple are perfect. They do plenty of things to piss me off and OSX has some really irritating features and flaws. Just like Microsoft and it's Windows OS.
mikegalos@msn.com
on Jan 8, 2009
PeyloW Reread what I said. Apple didn't sell their customers an iTunes Music Store, they sold them licenses to music. And the product they sold them was low quality encoded and DRM locked. That is non-competitive these days.
mikegalos@msn.com
on Jan 8, 2009
boy So, now that you've admitted that Apple is just another business, go back and explain your argument that Apple couldn't be the ones responsible for or profiting by charging a roughly 30% fee for removing the "DRM feature" that provided absolutely no benefit to the customer in the first place.
tayme
on Jan 8, 2009
"Amassing a collection of ANY restricted music tracks is a mistake." I have about 5,000 tracks right now from my Zune Pass. I can play them on up to 3 PCs and 3 Zunes(yes, we have 3 Zunes in our house). The Zunes can connect to every audio device in my house and cars. I don't need to burn CDs. Plus, I get 10 free per month that I can use as I see fit...so, if I do need to use a song for a slideshow or something...there it is. I've had the Zune Pass for 13 months now...thats $195 dollars or about $0.04 per song. I get to keep them as long as I have my Zune Pass...plus add as many more as I want. That works for me and I am wondering how that is a mistake. --tayme
boyreinvented
on Jan 8, 2009
@Mike As a business, if a supplier was charging 30% for something, then it wouldn't make sense to just absorb that cost. It makes sense to pass it on. That's what Apple has done. The DRM was there because of the supplier, not the retailer. Where is your argument?
Ocean
on Jan 8, 2009
And Paul lies again. Why did Paul leave this line out? From the same website he quoted from: >>But it looks like **the labels** prevailed in sticking it to consumers on one last point. Anyone who wants to upgrade their entire existing iTunes Library to DRM-free versions of the same songs, can conveniently do so with one click. But it is going to cost you 30 cents a track to do so.<<
Ocean
on Jan 8, 2009
Lots of good content in this thread. Even sir Mikey can see the error(s) that Paul is committing. This is the day Thurrott came to equal Dvorak.

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