Apple’s next step

Great news from Apple this week regarding iPod sales. Following the note on Daring Fireball that Apple is making its money on the unit and not the songs within the iTunes Music Store, I’m offering to Jobs and Co. their next smart move:

Let iTMS buyers select high-bitrate downloads at additional cost.

Think about it: to many people, 128Kbps AAC files sound “fine.” But they don’t sound good. Many people, particularly a subset of devoted music fans, would rather listen to a circa-1985 boombox than suffer the ignominy of lossy 128-bit encoding. I, for example, rip CDs at 192K or better, and I’m debating a switch to Apple Lossless encoding, even though I’ll be able to cart less music around.

Loyalty to quality audio has mostly kept me out of shopping in iTunes. My wife has bought a few albums, mostly pop, where sonic quality matters less; my purchases have largely been dance tunes and single-song impulse buys. I’d rather spend $13.99 on a better-sounding audio CD than $11.99 within iTMS, convenience be damned. (I also retain an affinity for tangible ownership, but that’s another issue entirely.)

Imagine, then, if iTunes offered me two choices: the usual 128-bit download for 99 cents and, say, a 256-bit “high quality” version for $1.49 instead. The cost difference would be minor enough to encourage select consumers to “upgrade”; full albums would still clock in at around $14.99—the same as a disc at retail—with similar audio performance. And the price differential would likely offset any increased server and bandwidth requirements on Apple’s part.

With such an option, I’d be shopping iTMS a lot more often, and Apple could conceivably make even more money while increasing my purchasing loyalty.