The iTunes Store is a software-based online digital media store operated by Apple Inc. Opening as the iTunes Music Store on April 28, 2003, it proved the viability of online music sales and is now the number-one music vendor in the United States. As of January 2009, the store has sold 6 billion songs, accounting for more than 70% of worldwide online digital music sales and making the service the largest legal music retailer.

While most downloaded files have previously included restrictions on their use, enforced by FairPlay, Apple's implementation of digital rights management, iTunes initiated a shift into selling DRM-free music, marketed as iTunes Plus. On Jan 6, 2009, Apple announced that DRM had been removed from 80% of the entire music catalog. 100% iTunes Plus availability was achieved on 7 April 2009, coinciding with the introduction of variable pricing, with the removal of songs not available in iTunes Plus from the store altogether.

Pricing Model

Since the introduction of the iTunes Store, individual songs were all sold for the same price with no subscription fee (in contrast to most existing online music stores at the time of introduction, which charged a monthly fee for access to their catalog). In the keynote at the 2009 Macworld Expo, two new prices were introduced. Currently, in the U.S., music may be priced $0.69, $0.99, or $1.29 (USD). Music in the store is in the Advanced Audio Coding (AAC) format, which is the MPEG-4-specified successor to MP3. Songs with DRM are encoded at 128 kilobits per second (kbit/s). As of the January 2009 Macworld Expo, Apple has announced that all music in iTunes will be available without DRM, and encoded at the higher-quality rate of 256 kbit/s. Previously, this model, known as "iTunes Plus", had been available only for music from EMI and some independent labels. Previews, thirty seconds in length, are available free, prior to buying a song. iTunes had the option between fully loading previews before playing, or simply streaming the preview; the former feature was removed with the release of iTunes 8. Complete albums are also available for a flat rate regardless of the number of songs on that album; albums on sale are typically at half-price. Podcasts are free. In addition, volume discounts of up to 20% are available for purchases of more than 25,000 songs.

Feature length movies and television episodes are available for purchase. Movies tend to be priced below a DVD of the same film while television episodes are approximately double the cost of a song.

Some games are available for some models of iPods for various prices, but none as expensive as a feature length film. In addition, the iTunes Store now offers Apps, which are applications used for various purposes (games, maps, movie showtimes, etc.) that are compatible with the iPod Touch and iPhone, although some Apps are specifically for the iPhone only. Some Apps cost money (called "Paid Apps") and some are free (called "Free Apps"). Generally, games are paid apps, while other various apps (i.e. movie showtimes and demos of paid apps) are free.

At the Macworld 2008 keynote, Apple CEO Steve Jobs announced iTunes movie rentals. Movies are available for rent in the iTunes Store 30 days after they have been released on DVD and are available for a cheaper rate. However, they only are accessible for 48 hours after users begin viewing them. This feature is not yet available in all countries.

Weekly Promotions

There is also a weekly promotion in which one to three songs are available to download for free to logged-in users. Free downloads are available on Tuesdays, and remain free until the following Tuesday. Some artists choose to have select songs available for no charge. This is not available at all iTunes Stores worldwide. Some iTunes television programs have begun the same technique to encourage brand loyalty; although those stay longer. In fact, the iTunes Store used to have a link to "Free TV" on its home page and the TV Shows section's home page which links to a complete listing of free TV shows, however it has disappeared (the page has remained online). Apple still sells free TV episodes; some channels, such as ABC and NBC, have their own pages of "Free Season Premieres". There are usually three different types of free songs on the United States iTunes Store: the regular featured free song, the Discovery Download (featuring songs from different genres), and the Canción de la Semana (Latino free single of the week). Most recently, iTunes has been weekly offering free music videos.

iTunes Music Store

The release of the iPhone and iPod Touch brought the introduction of the iTunes Music Store. This version of the iTunes Store allows owners of the iPod Touch and iPhone to purchase music and download podcasts directly on the portable music device. Originally to access the store the user had to be connected to a Wi-Fi network in order to enter the store, hence its original name: the iTunes Wi-Fi Music Store. However, at Macworld 2009, Apple issued a software update which automatically allowed 3G and EDGE users to access the store's full functionality for files smaller than 10MB.

Digital Rights Management

Apple's FairPlay digital rights management (DRM) is integrated into iTunes, which manages songs purchased from iTunes Store. iTunes relies on FairPlay to implement three main restrictions:
Users can make a maximum of seven CD copies of any particular playlist containing songs purchased from the iTunes Store.
Users can access their purchased songs on a maximum of five computers. Songs can only be played on a computer with iTunes or an iPod; other MP3 devices do not support FairPlay encoded tracks.
There are no restrictions on number of iPods to which a purchased song can be transferred nor the number of times any individual song can be burned to CD.

When Apple initially introduced FairPlay, songs purchased through iTunes had limits of three simultaneous machines and ten CD copies of a playlist. The adjustment to the current limits was implemented with the introduction of iTunes 4.5 in April 2004, presumably as the result of re-negotiations Apple had with major labels.

Competitors accuse Apple of using iPod, the iTunes Store, and "FairPlay" to establish a vertical monopoly and a lock-in for iPod users to use the iTunes Store exclusively (and vice versa). This "lock" has two aspects: Apple has maintained tight control of its FairPlay encryption. Other online music stores cannot sell music files encoded with FairPlay, and competing devices from companies such as Creative Labs and iriver cannot play such files. This means that consumers who want to listen to songs downloaded from the iTunes Store must either have an iPod or convert the files to an open format. The iPod does not play files encoded in the Microsoft's WMA format or RealNetwork's Helix-protected format used by other online music stores.

Movement Against the Use of DRM

On February 6, 2007, Steve Jobs called on the Big Four record labels to allow their music to be sold DRM-free. On April 2, 2007, Apple and the record label EMI announced that the iTunes Store would begin offering, as an additional purchasing option, tracks from EMI's catalog encoded as 256 kbit/s AAC without FairPlay or any other DRM.

On May 29, 2007, Apple released version 7.2 of its iTunes software, allowing users to purchase DRM-free music and music videos from participating labels. These new files, available through the iTunes Store, have been called iTunes Plus music by Apple.

On May 29, 2007, Apple released version 7.2 of its iTunes software, allowing users to purchase DRM-free music and music videos from participating labels. These new files, available through the iTunes Store, have been called iTunes Plus music by Apple.

In October 2007, iTunes Plus ceased to be a purchasing option. It instead became automatic for all iTunes Plus licensed content. In addition, the price of iTunes Plus reverted to the DRM price.

App Store

With the launch of iPhone 3G and the 2.0 iPhone OS firmware for iPod Touch and iPhone owners, the App Store allows people to download applications through the iTunes desktop software or the App Store on their iPhones. As of March 17, 2009, there are over 25,000 third-party applications available. The applications can only be run on iPhones or iPod Touch. Each application is also proected with iTunes FairPlay DRM.