According to a post at Apple rumor and news site AppleInsider, version 1.4 of Apple’s iTunes Producer software now offers the ability to encode music using Apple’s Lossless Encoder. iTunes Producer 1.4 is the package used by the record labels to rip their music for sale in the iTunes Music Store.
Does this mean we’ll be seeing lossless tracks available from iTMS in the near future? It’s possible, but is by no means a slam dunk. First of all, support for Apple’s FairPlay DRM scheme is missing from the Apple Lossless Encoder. That said, it should be fairly trivial for Apple to add that support should it desire, even though it is a different format than the AAC used in tracks sold on iTMS.
We also do not know that the record labels care to sell lossless music. It is conspicuously absent from all the major online music stores, with the sole exception of AllofMP3.com. The Russian site offers a number of different codecs and bitrates to its users, including lossless. That—along with low prices and a wide selection—is a big reason for the popularity of AllofMP3.com.
On the other hand, there are a couple of reasons we might see lossless music appear on iTMS. First, it might help sell some iPods. Lossless music files are large music files, at least compared with AAC and MP3s. By way of example, look at the track "Not Tonight" by The New Cars. The 3:25-long track I purchased from iTMS in mid-April is 3.4MB. In contrast, a Apple Lossless Encoder version I ripped from the "It’s Alive" CD is 25.8MB. At that rate, an iPod nano would get filled quickly and owners of larger-capacity iPods wouldn’t be looking at so much empty space on their players. That could have the effect of increasing demand for larger iPods, which would in turn add to Apple’s bottom line.
The other key consideration is pricing. Consumers and Apple both like the flat, 99¢-per-track model of iTMS (and Apple won that battle), but the record labels don’t. Offering lossless versions of the songs would give the labels an opportunity to charge more. It’s easy to envision a model where 128Mbps AAC files continue selling for 99¢ each while lossless files go for US$1.29 a piece. As long as the price difference isn’t too high, it is likely to prove attractive to some consumers.
Of course, everyone at Apple and the major labels might be content with the current system and it could be that if we do see lossless music at iTMS, it will come from smaller, independent labels. Or we might not see it at all.