While the size of the download would increase significantly, a typical music CD would still be a lot smaller than a Divx encoded movie, so bandwidth shouldn't be an issue either.
In a private release of iTunes Producer 1.4 this week, Apple said the software "now encodes music in Apple Lossless format, which produces larger audio files and will increase upload time."
iTunes Producer is distributed to record labels by Apple as a tool for prepping and submitting their content for inclusion on the iTunes Music Store.
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