Apple Keeps Humming

Apple's(AAPL Quote) deal to put the EMI music catalog on its iTunes store without antipiracy software is a master stroke that should cement Apple's dominance -- and could lead the change in how most consumers get their music.

The Digital Rights Management-free tracks from EMI will be priced higher -- at $1.29 a song -- than their protected counterparts, but will come at a higher quality.

iTunes customers can upgrade their entire library of all previously purchased EMI content to the higher-quality DRM-free versions for just 30 cents a song, says Apple.

The lack of restrictions and the higher-quality sound could potentially make iTunes the clear choice for music distribution, as users get rid of the intermediary step of buying CDs from retailers and "ripping" tunes onto their iPod.

The deal shouldn't come as a surprise to Apple watchers.

In February, Apple CEO Steve Jobs wrote an essay posted on the company's Web site saying that a truly open music retail system is "clearly the best alternative for consumers, and Apple would embrace it in a heartbeat."

By opening up the iTunes system, Apple has turned itself into the most important link in the music distribution business and has turned up the heat on subscription-based digital music rivals like Real Networks(RNWK Quote), Napster(NAPS Quote), and Yahoo!(YHOO Quote). Apple expects about half of the 5 million songs currently on iTunes to be offered DRM-free by the end of the year.

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