By Philip Elmer-DeWitt
January 7, 2009

When Apple announced Tuesday that it was finally lifting the so-called digital rights management (DRM) restrictions that iTunes music customers found so onerous, it left one thing out: the cost of doing so — in money and, as we learned overnight, time.

“We are thrilled to be able to offer our iTunes customers DRM-free iTunes Plus songs in high quality audio,” said Steve Jobs in a press release.

“It’s really easy,” said senior vice president Phil Schiller in his Macworld keynote address, “to go in and convert your entire music library” with one click.

He didn’t mention that it would cost you 30 cents per song, 60 cents per music video, and 30% of the cost of an album to do it.

Leave it to Apple (AAPL) to turn the lifting of restrictions into a profit center. If users convert every one of the 6 billion songs purchased from the iTunes Store over the past six years, a rich new revenue stream will flow toward Cupertino. Techcrunch’s Erick Schonfeld calls it a “$1.8 billion music tax.”

Of course, not all of those 6 billion songs will be converted. Apple’s DRM protection scheme made it difficult to move music from one computer to another, share it with friends or play it on a non-Apple music player, such as SanDisk’s (SNDK) Sansa Fuze or Microsoft’s (MSFT) Zune — restrictions that don’t affect every iTunes customer.

Besides, as AppScout helpfully points out, you can still make your songs DRM-free by burning them on a disk and ripping them back into iTunes.

But the burn-and-rip process is cumbersome and wastes a lot of plastic, so we decided to try the Schiller one-click method.

The first thing we learned was that it’s not quite as easy as he made it sound.

When I went to the iTunes store, the little “Upgrade My Library” button, which usually appears at the bottom of the Quick Links box in the upper right hand corner of the front page, was mysteriously missing.

It took some time to figure out why. If you have several iTunes accounts — as I do — you have to log in on the account you used to purchase your songs before you can convert them. (Note to Steve: Removing a button is not the best way to send this message to a user.)

When I finally situated myself in the proper account, the button appeared. I clicked it and held my breath. I have a lot of stuff in my music library — 4,579 songs, to be precise. Converting all that music could be prohibitively expensive.

As it turned out, the bulk of my songs had nothing to do with Apple. Most of them were copied legally from my — and my friends’ — CD collections.

But 231 songs — consisting of 100 individual titles and 6 albums, according to iTunes — had been purchased from the Apple store and were eligible for conversion at a cost of $50.60.

OK. At 12:25 a.m. PST, I clicked and waited.

Seven hours later, I’m still waiting.

“Your iTunes Plus upgrade is now processing,” my computer tells me. “When your iTunes Plus music is ready to begin downloading, you will receive an email with download instructions and other information about your upgrade.”

Either a lot of people decided to convert their music Tuesday night, overburdening Apple’s iTunes servers, or this is a more cumbersome process than I — or Phil Schiller — imagined.

UPDATE: Three days, six error messages, three phone calls to Apple, two intercessions by iTunes customer support and $109.47 later, I’ve successfully update all the copy-protected items in all my accounts — 473 songs and 14 albums. I think I may need a better sound system to hear the difference in audio quality.

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