Wednesday, February 8, 2012 [Tweets] [Favorites]

How iTunes Match Works for Copyright Holders

Jeff Price (via John Gruber):

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 iMatch. She now clicks on the same song and plays it through her iMatch service. Copyright holders get paid.

Two interesting points here. First, you pay Apple a flat fee for the ability to download, whether or not you actually do; Apple pays the music labels each time you actually download. So Apple is playing the odds here, hoping that the average user won’t have more downloads than expected. Second, the labels get paid even if you’re just downloading a backup of music that you’d already bought on CD. I can see why Apple likes this, but it doesn’t seem like a good precedent for users.

2 Comments

No, I think you missunderstand how it works. It seems like Apple is using the number of times each song is downloaded to calculate how much money each respective songwriter/record company gets.

Let's assume people pay $100 000 000 for iTunes Match. Apple keeps $30 000 000 and splits $70 000 00 between all record companies and song writes. If your song had 10% of the total number of donwloads, you get 10% of the $70 000 000, if it had 1% of the downloads you get 1% etc, etc. You not downloading anything just makes some of your money to potentially go to artists you don't listening to.

I also don't see the problem for costumers. I buy a service that I want and pay a price that I find acceptable, or I don't buy the service...

@Bror I see, so you think that Apple is using the number of downloads to apportion a fixed pot, rather than counting them to decide the size of the pot? That does make sense. The record labels get paid even if people don’t download, and Apple’s exposure is limited.

At the micro level, yes, either the service is offered at a price that’s acceptable to you, or it’s not. But if you look at the whole system, I don’t think it’s a good precedent that consumers should have to pay again for what they’ve already bought. If I back up my music to S3 or CrashPlan, should Amazon or Code 42 have to send some money to EMI when I restore? That doesn’t make sense.

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