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.

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5 Comments

  • Tom Weaver

    "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."

    You mean in all these years, they never checked out last.fm charts?

  • atimoshenko

    The Industry has been trying to push all you can eat subscriptions for over ten years now. Personally, I do not expect significantly greater success with the approach in the next ten years. Stop paying at one point and have all of the content you want to preserve immediately disappear? Does not sound attractive to me. Indeed, sounds more like extortion. 

  • Micah

    Keep in mind not all music that will use iTunes Match is even pirated.  A good portion of my iTunes Library is music I actually own on CD.  Since it wasn't actually purchased via iTunes, the way I understand it, I will have to pay for Match to have it sync with iCloud.  Therefore the music industry will be making EXTRA money off of LEGAL music as well.

  • William H. Magill

    Sigh... when is the "record industry" going to learn -- the reason that their sales are off has NOTHING to do with Piracy. People simply got fed up with the crap that A&R folks were packaging and the ridiculous prices they then charged for that crap. New artists don't sign with Labels because they don't want to forfeit all their artistic license to some fat, cigar-chomping bozo trying to look and sound "hip." Apple's iTunes gave people the ability to pick and choose what music they wanted to listen to and in what relationship to other music... no more being forced to sit through "a side" worth of crap just to play one song.

    Being a long-time Mac user, I don't know that iTunes match will much matter to me... I already sync everything between my iMac, iPhone, iPad and old iPod... as well as my son's PC, and his iPhone. Keeping our music libraries separate is a far bigger issue than syncing the 100+ Christmass music CDs I've accumulated over the years.

    Now if Apple REALLY wanted a winner -- iMatch would also digitize and catalog my LP collection for me!!! Over 50 years one accumulates "a lot." (Ii did get rid of all my old 8-track and cassettes ages ago, but the Vinyl (33 & 45)... a tremendous amount of it is still quite unique... never re-issued on CD and rarely available on-line. (And, just for the record, Apple ... I do have the old, yellow-plastic record of Tom Corbett Space Cadet's March... so my digital copy of that tune is completely legal!)

  • Ernesto Romero

    I think Itunes match is giving users the oppotunity to have a fresh start. It is brilliant because users can keep their music, become "legal", and encourage them to buy, because now it has all the added value of the iCloud. 
    Users will probably prefer to pay rather than having to go through all the process of itunes match every time.

    And just as a comment, itunes store has 180 million songs not 10 billion (it has 15 billion downloads)