Apple's Music Match: Innovation By (Record Label) Committee

from the is-this-really-so-special? dept

Well, pretty much everything in the announcement of Apple's iCloud "Music Match" music service was leaked or predicted prior to the announcement today, so there's not much that seems particularly surprising. Basically, for $25/year, you can have Apple scan your music and anything that it already has in the iTunes store will automatically be available to you on all your other (Apple?) devices. A lot of people noted that this appears to focus more on syncing rather than streaming. That is, almost all of the talk was how all of the music would be available to download to whatever device you had synced to the system, rather than any sort of streaming player. Still, none of this seems particularly revolutionary. The music match functionality seems identical to what Apple bought from LaLa nearly two years ago. The syncing features are nice, but plenty of other services have allowed file sync between devices. It sounds nice, but nothing all that amazing.

The real story may be in the terms of the deal. While the labels allegedly turned down $100 million from Google to offer the same functionality, they took $150 million from Apple for this deal -- as an advance on approximately 58% of all of those $25 fees. Depending on how much music you actually have, the $25/year might be a decent deal compared to other cloud storage offerings, but Apple isn't going to make much money on it. Between the storage/bandwidth fees and having to fork over so much to the labels, this has to be a loss leader type of deal, with hopes that it sells more hardware (probably not a bad bet for Apple). Of course, that explains why the Google deal may have been "unsustainable" in the eyes of Google. It doesn't really have the hardware revenue to fall back on.

Still, it makes you wonder what, exactly, Apple is paying the labels for here. What's really being licensed? Effectively it's the ability to match the songs and put copies in a locker, which basically means that the labels are getting paid -- yet again -- for songs that they already sold to people.

That said, the other interesting thing about this is that while the labels were pushing everyone else to figure out ways to block tracks that didn't have a clear authorized lineage from being included in such deals, that does not appear to be the case here. As a friend noted to me after this announcement, if someone creates a dropbox or other mountable hard drive with a ton of music, and people mount it and then run the matching software on it, they could technically "launder" unauthorized tracks through Apple and have them in their "cloud" pretty easily. Which means... expect stories in the very near future from RIAA-types about this horrible "new trend" of massive mountable drives that people use to then dump thousands of songs into their Apple music storage. How long until someone tries to pass a law about that sort of thing?

The other interesting bit? While the big four music labels apparently got that $150 million as an advance, all of the indie labels? They get nothing. Not only are they not getting any advances, but they get a smaller percentage than the major labels. Apple pretty much realized that if it had the big four labels, the indies would more or less be forced to come on board at whatever terms Apple wanted.

On the whole, lots of folks seem excited about this, and as with so many Apple offerings, I'm sure lots of people will use it and it will do quite well. But I just don't see what's so compelling about repaying to access my own (legal and authorized content) via other devices, when I've already set up plenty of ways to do just that already.
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Filed Under: cloud, music, music match, record labels
Companies: apple

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  1. icon
    AdamR (profile), 6 Jun 2011 @ 6:26pm

    Re: Re:

    This is big win in these regards.

    1. They save a ton on bandwith, no uploading of tons of mp3s. They also save terabytes of storage since they only have pointer to files they already have.

    2. Locks people further into their hardware and more their software platform. (ie I tunes and AAC file format)

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