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iTunes Match Not Laundering Pirated Music, It's Driving A Subscription Future

Music industry execs tell us how Apple's new syncing service might help them—and everyone from Rhapsody to Rapidshare.

record collection

One of the interesting things about the new iTunes in the Cloud service Apple announced Monday is that it doesn't only include the music that you buy through iTunes. Through an additional service, called iTunes Match, Apple will also sync any music you own (that has a match among the 18 million songs in the iTunes store) to all of your devices.

The knee-jerk reaction from some was to say Apple had effectively created a way for users to pirate songs from wherever and have Apple launder their files, exchanging them for for clean ones. "This puts together a model that allows people to make money off of pirated music," Jeff Price, founder and CEO of digital music hub TuneCore told Mashable.

The service will cost $24.99 a year, and Apple is reportedly doing deals with labels and publishers to sanction this service. What the knee-jerk reaction neglects to consider is that Apple will reportedly pay labels royalty-style installments every time one of their tracks gets moved through the iTunes Match system. And since it appears that Apple is not going to distinguish between authorized and unauthorized tunes, the music industry might finally earn some money on illegally downloaded tunes that were previously pure loss.

But industry executives Fast Company spoke with, who asked not to be named due to the amount of power Apple now wields in their business (and Apple is still cutting deals with some labels), said the amount that gets recouped will be negligible, compared to the size of the losses. More important to them were the insights they'd be getting into which songs consumers liked—information they'd lost access to in the piracy world.

More important still, the executives said, is that iTunes Match will help get people back in the habit of paying for music. Even though, technically, of course, iTunes Match isn't charging consumers for the music per se, just for the syncing. Still, the executives said, after a decade of treating music like it should be free, consumers will now start (or restart, really) to associate costs with the product.

This, the execs said, will be useful for where we're all headed: subscription services. In five or ten years, they said, based on trends they're seeing today, consumers won't be buying individual tracks and albums. Rather, most will simply subscribe to services like Rhapsody and Spotify and get their music that way.

iTunes Match, then, plays a valuable role for the industry. Not because it allows them to recoup much in the way of losses from piracy. But because it gets people back in the habit of paying for music and primes them for the future awaiting us all.

It's no wonder, then, that Rhapsody president Jon Irwin was cool-headed when he spoke to Fast Company following Apple's announcements, which constitute a giant moving into his company's space. "Anytime you've got a company like Apple—they're a great company and they make great products—the awareness it's going to bring to cloud music ... I think that's something we can leverage."

[Image: Flickr user Adam Melancon]

E.B. Boyd is FastCompany.com's Silicon Valley reporter. Twitter. Email.