It takes a recession for two hostile camps to sit down and toke together on the peace pipe. Since the introduction of iTunes in 2003, the digital online store has performed a musical quasi- miracle. While music sales were plummeting everywhere else, iTunes was busy racking up the sales (more than five billion songs to date) and becoming the biggest single retailer in the all-important US market.

But iTunes’ relationship with its core providers (the labels) has been, at best, fractious. With a more than 80 per cent stranglehold on the global download market, iTunes could afford to act in an imperious manner. Some record-company people allege that iTunes has a “take it or leave it” approach to the labels that are reimbursed for the use of their music.

After a super, soaraway first five years, iTunes faced its first real problems in 2008: it hadn’t yet come to an agreement with The Beatles; AC/DC and Kid Rock were both shouting loudly about how they didn’t need the site to have number-one records; and, perhaps most crucially, iTunes was beaten to the subscription model of music purchase punch by Nokia, which unveiled its Comes With Music phones.

It didn’t go unnoticed at iTunes that the four major labels had quickly agreed a deal with Nokia to provide their entire catalogues to phone users for a fixed fee. But similar talks between the labels and iTunes over the latter’s subscription service failed to conclude a deal.

The labels have always been totally opposed to to iTunes’ “flat fee” policy – every song on the site has the same price ($0.99), whether it sells two copies or two million. The only way the labels could express their dissatisfaction was to provide iTunes with digital rights management (DRM)-locked songs, meaning that if you bought a song on iTunes you could play it on an Apple iPod or iPhone only. The consumer has never really had full “ownership” of songs that are DRM-locked, thereby undermining the iTunes songs.

It is widely believed that the labels have encouraged competition to iTunes in an attempt to dilute its enviable market share. Many of these iTunes rivals have come and gone, but just two years ago a serious player entered the marketplace – Amazon MP3, the music- download branch of the well-known online shop.

There was no surprise when the labels decided to service Amazon MP3 with DRM-free product. They were giving the store a leg up to make it more attractive to consumers. And it has worked. In the US, Amazon MP3 has begun cutting into iTunes’ sales. It has just launched in the UK and is expected to enter Ireland later this year.

Hence, last week’s communique from iTunes that it was going to change its pricing policy and take the DRM lock off. With the recession beginning to bite deep, the company essentially agreed to the labels’ pricing demands.

Using US figures, iTunes will now replace its $0.99 flat fee per song price with a three-tiered affair. New releases by big groups will cost $1.29, “ordinary” songs will cost $0.99, and some back- catalogue material will cost $0.69. The record companies got their way. All future iTunes releases will be DRM-free and if you want to “unlock” your past iTunes purchases, it’ll cost you $0.30 a song.

Everyone but the consumer is a winner. While the labels and iTunes have flexed their corporate muscle, essentially this is a price rise for most users. Hit singles have jumped in price, and these constitute the majority of iTunes sales.

The fact that iTunes has either capitulated or met the record companies halfway (depending on how you view it) is significant. Now that the DRM lock has gone, surely the next concession by iTunes is to allow artists to sell their music as they see fit.

The reason some acts are absent from the site is that they’re not allowed to get around the “individual download” rule, ie, they want to sell their music in its complete album form only, not as a series of individual tracks.

The way things are looking, that too could be gone within 12 months.