Was iTunesLP a concession to the labels?

Paul Bonanos today breaks out some information on the background of the iTunes LP story.  From his Apple sources, it sounds like Apple made a concession to the labels to build iTunesLP to get DRM-free music. 

I’m told by an industry source who preferred to remain anonymous that iTunes LP wasn’t Apple’s idea in the first place. Rather, it’s the result of the same renegotiations between Apple and the major record labels that yielded DRM-free songs and flexible pricing early last year, a concession by Cupertino to make a gesture in favor of album sales as consumers increasingly show a preference for digital singles.

There are now 29 iTunesLPs, up from 12 at launch.  Everyone thought that the tablet was going to be the perfect platform for the iTunesLP format but Steve Jobs only gave music a minute at the iPad announcement and none of that time was for iTunesLP.

Perhaps the reason for the slow uptake is the original high costs of producing in the format.  

One person who worked on an iTunes LP project said Apple subsidized the initial group of LP editions, which were created by the company’s handpicked third-party developer at costs of up to $60,000. All are issued in “deluxe edition” releases that feature extra tracks, typically priced a few dollars higher than iTunes’ customary $9.99. Neither Apple nor anyone else I spoke with was able to break out sales figures, but sources in various parts of the music industry agreed that the financial impact of iTunes LP on record sales has been tiny, if it’s had any effect at all.

iTunesLP development has recently been opened up for indie developers which should be able to build LP development price down from the first iTunesLPs.  That hasn't yet given iTunesLP much traction however.  That might require Apple's blessing, something a "concession" probably won't get.