Apple’s strategy with its iPod and iTunes store has served as a model for the Kindle and other ebook makers. So this announcement from Apple to drop DRM protection from its entire catalogue of online music marks a significant change and is likely to be watched with interest in the ebook market.
The change was most likely pushed for by Apple rather than the music labels but it carries risks for both parties. [UPDATE: See this New York Times article which claims that Jobs initiated the move and, indeed, played hardball with record execs to get his way.] It is a sign of the extent of pressure from consumers to drop copy protection. Apple loses an element of its “lock-in” strategy since its users will no longer have to trash their song collections if they switch to another MP3 player. And while music publishers will be nervous about the scope for piracy from the newly DRM-free tunes, the reality is that there are plenty of other sources for pirated music so Apple’s iTunes move isn’t likely to lead to much of an increase here.
On the positive side, the move should provide some good data for other publishers, including ebooks, on the impact to sales of dropping DRM. Let’s hope that Apple and the music publishers are reasonably open in sharing this. My guess is that its overall impact will be positive for all parties: publishers, Apple and consumers.