With today’s announcement comes many interesting apple-related issues. I don’t want to talk about one of them just yet, but if you want an idea just look at the new iPhoto and our iLovePhotos. My main issue to talk about, though, is the outrageous pricing rip off that is this “generous” iTunes Plus upgrade from Apple. Now Apple has finally got on the bandwagon for a completely DRM free music store (see Amazon what 6 months ago?). And really I am excited. I love the iTunes store. It is by far the best way to browse digital music. For awhile now, I would browse for music on iTunes and then buy it on Amazon. Now that iTunes is (or will be) completely DRM free, I can revert back to buying my music on iTunes. But will I?

First of all, we have to applaud Apple on offering songs for a great price: 69 cents. I understand that they need to retain the 99 cent price point, but they gave in on the 1.29 price point to the record companies. Maybe this is another one of the reasons Steve did not take the stage for MacWorld. He was just too god damn ashamed of giving in to the record labels. 99 cents was the perfect price for a song. It wasn’t too little, and it wasn’t too much. People could swallow the idea: a buck for a song, but the psychology of a $1.29 song just fails. People have 99 cents ingrained in their heads as a feasible price for music. Even charging 2 cents more, $1.01, would cause people to reconsider purchasing the music. And certainly a $1.29 song will scare people away even more.

I’m very displeased with this variable pricing. It’s bad for everyone. Consumers obviously don’t like paying more, and that means the labels won’t make as much money. I can’t understand why Apple would give in on this. They are now the #1 retailer for music above all other companies. That should mean that they have an enormous amount of power to push the record labels to this proper and sensible conclusion: leave the cost at 99 cents or risk alienating a lot of honest people.

Which leads us to our next disappointing announcement: 30 cents per song to upgrade your previously purchased music to iTunes Plus. Yes, I know that when I bought the song, I was buying a DRM protected song, and legally I have no right to demand a non-DRMed version, but that doesn’t mean Apple should not have offered this upgrade as free. Offering this as free is a win, win. Charging for this “service” is a complete joke and it’s only going to hurt Apple.

Apparently I have 283 songs that need to be upgraded (I’m sure I have bought more than this so I’m assuming the rest are just not DRM-Free yet). And still for only 283 songs I will have to pay $70 dollars to upgrade them. Really? In terms of marketing, 30 cents a song doesn’t sound bad, but when you look at actual music libraries, some that are far larger than mine, that can really add up. I can’t see spending 70 bucks upgrading, and I don’t think a lot of other people will either.

What Apple should have done is offer a free upgrade. I know this would be financially expensive (all the bandwidth required to re-download all these songs), but in so many ways it would be beneficial to the iTunes Music Store. Users bought in to iTunes originally because they wanted to legally buy music online. And those original users, even the users who only started a few months ago should all be rewarded for their honesty. Of course, EMI and the others owe us nothing for acting morally and legally correct, but that does not mean they shouldn’t give us something. It would only be good PR.

Imagine this: Apple goes onstage, announces the new deal, says that all songs will be 30 cents for upgrade. Then, Phil says “I’d also like to acknowledge EMI. EMI is a great company and was one of the first to be on board with DRM-Free music. And now, to show their graditude to their loyal customers, they will be offering their catalogue as a free upgrade to those who have previously purchased songs. So any song you’ve bought by EMI, you won’t have to pay the 30 cents. It will be upgraded automatically and free (pause for applause).”

Can you imagine the good press EMI would receive from this? Not only would it make EMI look like the good guy and win the hearts of music customers around the world, it would also make the other record companies look like the jackasses they are. And EMI would be the record company for the consumer. The record company that gets it.

But, no such thing happened. We are stuck with companies that would rather screw their previous customers and gouge them for as much money as they can than establish reliable and respectful relationships with their customers. All this upgrade fee is doing is convincing good customers that their honesty was not worth it to the record companies. It will lead them to buying less music or resorting to piracy (not because they are not willing to pay for music, just not willing to pay money to a company like the ones we have described).

The record labels have also squandered an opportunity to convince music pirates that they should start purchasing legally. All this has done is push away previous customers, keep pirates away from purchasing legal music, and in the end they probably won’t make much money either.

This was simply a missed opportunity, and I am upset that in a time where the record lables have progressed (completely DRM-Free iTunes store) they still are making dumb and insulting mistakes. What are your thoughts? Will you upgrade? If you are a pirate, would the above scenario about EMI convince you to change your ways even a little?