Apple's Digital Rights Management War is Almost Over

While the MacWorld 2009 was considered less than stellar, the Digital Rights Management (DRM) announcement signaled the 'beginning of the end' of what has been a long battle to free music. The Apple announcement in effect stated that DRM functionality will be removed from 80% of the entire music catalog immediately and progressing to 100% by April 2009.

How does this affect me?
In short, you can give someone a song that you purchased and they can play it on their digital device as long as their device can read the format (mp3, aac). Previously if you and a friend each had an ipod and you wanted to share a song you couldn't.
 
Could this Impact CD sales?
Given that most of the CDs sold today are not DRM restricted this announcement most likely won't affect existing CD sales.
 
What about iTunes songs that I've already purchased?
Apple provides the option to upgrade your library to DRM-free versions of your tunes. It will cost you an extra $.30 per song if you find that valuable. A link on the right side of the iTunes store Quick Links shows you how many song in your library are available DRM-free. My library has 164 song available for upgrade and it would cost me $42.30. Personally I would prefer 42 new songs rather than unlock the 164 old songs.
 
 

Was this driven by other online stores being DRM-Free and how will it affect them?

While this certainly has been a public philosophical crusade for Steve Jobs for the past several years DRM Free is already supported by a number of their competitors in the online music space including Amazon, eMusic, Dogmazic, Amazon, and Beatport. Clearly it has been a key differentiator and moving forward it won't be a differentiator for Amazon and obviously those that don't fully adopt DRM-free music delivery will be at a disadvantage. Microsoft has a good portion of DRM-Free music in their store but this will obviously motivate them toward full adoption for their Zune products.
Why did it take so long for this to happen?

When the iTunes store opened on April 28th, 2003 Apple had put together the first widely publicized distribution system for digital music. Part of this feat was convincing the big five (later 4) music industry giants to support which included implementing a DRM system that would prohibit transfer of the music. Since then Apple has been moving toward DRM-free music.
Some Major Milestones on Apple's drive to DRM-Free Music

February 2007: Steve Jobs published an open letter where he called on the 'Big Four' music companies to remove the DRM requirements. His main points1 were:
* DRM isn't and can't be perfect since hackers will always find some way to break DRM.
* DRM restrictions only hurt people using music legally. Illegal users aren't affected by DRM.
* The restrictions of DRM encourage users to obtain unrestricted music which is usually only possible via illegal methods.
* The vast majority of music is sold without DRM via CDs which has proven successful

April 2007: Apple and EMI announced that EMI's complete music library would be available DRM-free for a 30¢ premium above the standard $.99 fee

May 2007: Amazon.com began selling DRM-Free files for 99¢ and Apple dropped their DRM price back to 99¢.

October 2007: Apple releases iTunes Plus which offers DRM songs at the usual $.99 price

December 2008: RIAA abandons mass lawsuit strategy in file-sharing war

January 2009: Apple announces last DRM protect music will be DRM-free by the end of Q1 2009

RG
 
Sources:
1.) en.wikipedia.org/wiki/Digital_rights_management