February 7, 2012

Apple’s iTunes Match (aka iMatch): The First Royalties Are In

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By Jeff Price
The first royalty payments from Apple’s iTunes Match are in, and they got me excited – the total amount is over $10,000 for the first two months.
This is magic money that Apple made exist out of thin air for copyright holders.
Let me explain:
Apple’s iTunes Match monetizes the existing behavior of the consumer for copyright holders and artists.  Consumers don’t need to do anything new­—they just need to listen to their pre-existing music.
Apple charges consumers a fee of $25 a year to subscribe to the iTunes Match service. Once a consumer pays the fee for the service, iTunes will scour the consumer’s computers or iPhone or iPads, and make all of the songs already on these devices available for the subscriber to re-download or stream on demand. If the song is in the iTunes music store, then the subscriber does not need to upload the song.
Each and every time the consumer either re-downloads or streams a song he or she already has, copyright holders get paid.
Or presented another way:
A person has a song on her computer hard drive.  She clicks on the song and plays it.  No one is getting paid.  The same person pays iTunes $25 for iTunes Match.  She now clicks on the same song and plays it through her iMatch service.  Copyright holders get paid.
Same action, same song, one makes money for the copyright holder, and one does not. This is found money that the copyright holders would never have gotten otherwise.
Some may complain that it’s not much money.  Well, before you were getting zero, now you are getting something.
Some people have talked about iMatch being an “amnesty” for those who steal music.  It’s not.  There is no “amnesty” being granted to anyone by Apple or the record labels.
Some people have expressed concern that if they have an illegally obtained song, Apple will report their data to the RIAA so the RIAA can track you down and sue you. No, they won’t, could not legally, and never would (you kidding me?!).
The music industry needs innovation. Services like iTunes Match, Spotify, Simfy, Deezer and others are bringing that innovation—it will take some time to learn which are the ones consumers want.  But in the interim, seeing an additional $10,000+ appear out of the thin air for TuneCore Artists by people just listening to songs they already own is amazing!