"anyone who buys one copy can distribute it to several million of his closest friends over the Internet"

James, when will you admit what the world already knows: anyone who buys a song from iTunes can burn it to disc, rip it to MP3, and post it on a P2P network with ease. For that matter, they can buy the CD, rip it, and upload it. In this sense, paying Apple for the song is already "voluntary," as you call it, and always has been - and yet Apple makes good money.

DRM on music stops law-abiding people from doing what they want with the music they paid for. It does *nothing* to stop uploading to P2P networks. Let's stop denying the obvious.

Mr. Gordon, DRM (and the DMCA) are meant to deter, not stop, piracy to the extent that business models can develop. Saying that DRM has *zero* effect on piracy as an argument that it makes no busienss sense is seeing the world in black and white.

Also, I don't think you hit on the main point of this post; which is that music labels may charge more for songs sold in MP3. The labels are trying to factor in how much they need to tack on in order to account for the potential of *increased* copying. It seems like all parties can benefit from this, that is, except consumers who already whine about paying $.99 per song:)

Noel,
Thanks for keeping me honest - I should not have said zero effect. But to paraphrase Mr. DeLong, "anyone who [removes the DRM from] one copy can distribute it to several million of his closest friends over the Internet." And since removing the DRM is as simple as burning the song to disc, the effect of DRM on keeping music off of the P2P networks is vanishingly small. The much more significant effect of DRM is to force consumers to pay separately for capabilities they have always had with CD's and tapes, such as the ability to play them on players from any manufacturer.

Now, as to whether Apple or the labels are to blame for that situation, I don't know enough yet, but I suspect that both are relatively happy with the status quo.

Mr. Gordan, your comments raise an interesting issue: does the pricing of DRMd music on iTunes already factor in the ease of stripping that DRM? I'm inclined to think so.