iTunes announced their plans for what they refer to as variable pricing back in January at the MacWorld show. Well today those plans finally went into effect and iTunes pricing will never be same.

Up until now, iTunes has been charging users a flat rate of 99 cents per download. Regardless of the song, it was yours for 99 cents. Todays changes bring about tiered pricing, which will be set by the music labels. The vast majority of songs will remain at the 99 cent price point. However, for the hottest hits on iTunes you will now have to pay $1.29. For some of the older, less popular songs the price is dropped down to only 69 cents.

As of today one-third of the top 100 songs are priced at the $1.29 price point with the remaining two-thirds holding steady at 99 cents.

The news isn't all bad. Especially for 3G iPhone owners. As part of this new deal, Apple is now allowed to allow iPhone users the ability to purchase and download songs over the 3G network.

Apple will also be dropping the stringent digital rights management system it has used on iTunes in the past. What this means in plain english is that you will now be able to freely move songs among your various computers and MP3 devices.

It will be interesting to see how the market reacts to this. A 30% price increase during very trying economic times is always a large risk. Will the higher price point inhibit people from downloading there latest favorite from iTunes? WIll more people use Amazon (still maintaing its buck a song fees) to download music now? Or, will this just lead to more illegal downloads of music?

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Time will tell the story here and I hope the record companies aren't getting too greedy. With digital music sales on pace to surpass the sale of CDs by 2012, I guess the record companies are trying to get a bigger piece of the pie.