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iTunes Match and iCloud: Pirate reward or anti-theft measures?

Apple’s (s aapl) new iCloud service comes with the ability to download your iTunes music purchases to any Mac, PC or iOS device associated with your account, and iTunes Match will extend that courtesy to your entire music library, regardless of where it comes from, when it arrives in the fall. Some claim the iTunes Match service amounts to a reward for music pirates, since it provides users with access to high-quality 256 Kbps tracks regardless of the source or quality of their originals. Others think that far from rewarding pirates, iCloud access to iTunes music provides a compelling legal alternative that should act as a piracy deterrent. So what’s the deal?

Speaking at the World Copyright Summit in Brussels this week, Victoria Espinel, the coordinator of U.S. intellectual property enforcement, said cloud music offerings like that unveiled by Apple on Monday “may have the effort of reducing piracy by giving value to consumers — the ability to own forever and access almost anywhere — that cannot be obtained with legal copies.” Espinel suggested that “the flexibility of the cloud may help spur the development of compelling legal alternatives.”

But wait, isn’t iTunes Match just “complete pirate amnesty?” After all, Apple didn’t specify any limitations on the ability of iTunes Match to scan and match ripped tracks and mirror them with 256 Kbps AAC tracks from its own iTunes library. In theory, those ripped tracks could’ve easily been ripped by someone else and shared via torrent or other less-than-legal solution. Also, the replacement tracks that Apple provides will be DRM-free, unlike those it gives current legitimate iTunes music purchasers using iCloud’s purchase history feature.

If iTunes Match does indeed process pirated music without issue, there’s no question that legitimate iTunes shoppers are the ones that end up looking dumb. Let’s say you download 50 albums from illegitimate sources, like torrent sites. With the $25.95 iTunes Match annual fee, you can download high-quality legitimate copies for about $0.50 per album. Compare that to probably around $9.99 per album when purchased legally through the iTunes Store, plus the $25 iTunes Match fee if you want that service.

Framed like that, it’s very hard to mount a convincing argument that iTunes Match doesn’t reward piracy. But it doesn’t only reward piracy. It also monetizes it.

Imagine a scenario where Apple hadn’t introduced support for content from sources beyond the App Store in iTunes Match. Would such a restriction discourage pirates? Hardly. Music piracy has been on the rise basically ever since it became possible, and shows no signs of abating. iTunes Match wasn’t likely to inspire music pirates to turn over a new leaf, no matter what.

What it does do, however, is allow record companies to recoup some of the losses associated with piracy, by effectively charging for music that was already stolen. In the example above, we saw how 50 albums works out to just $0.50 per year with iTunes Match if the music is pirated, but that’s still a massive increase when compared to the big goose egg.

Of course, iTunes Match amnesty could also actively encourage piracy, because of the obvious value proposition referred to above, and lead to an even steeper rise in the rate at which digital music is being stolen. But just like Apple may ultimately have sacrificed the Mac in order to score a victory in the larger future of cloud computing, it also might be willing to hasten the demise of traditional digital music sales (which seems inevitable anyway) in order to move to a more future-proof, subscription-based model. To use an old maxim, Apple may have cut off the limb to save the body with iTunes Match.

15 Responses to “iTunes Match and iCloud: Pirate reward or anti-theft measures?”

  1. Glad to see there’s some who support us musos. Very few of us will see any of those billions(only the top 3% or so) For the rest of us indie or ‘minor genre’ (ie, anything that isn’t rock, pop, hip hop, or country) artists, it isn’t going to help much. Those genres exist because we used to survive on the relatively large margin on each self produced CD we sold (or on small labels) – about £2-3 in the UK. Services like Spotify pay a pittance compared, and I don’t see this paying much more. The plain fact is we’ve been losing money on our albums for years now, and for a lot of us, this kind of thing is the last straw. You need millions of fans to break even now (never mind a profit) and we can’t afford the PR required for that. So many, like me, aren’t making ‘art’ music for the consumer anymore. It costs too much and takes up too much time for too little return. How many of you have $40,000 to spend on a vanity project/hobby ? Me neither … So for now, in spite of the fact I do have 1000s of sales and fans for my work, I have no plans to make another record. I can’t afford it.

  2. I don’t think Apple has found a way to “reward pirates” as you’ve suggested, I think they’ve found a price point which will convince the masses to not be pirates anymore. And if presumably the artists will end up with some of the BILLIONS in revenue this will generate, then doesn’t everybody win?

    • There is no price point that will convince people not to be pirates. When they can get something for free, any price above free isn’t attractive. Many pirates will tell you they do it because the prices are too high, but that is just a red herring. If you lower the price, they will then tell you it’s not in the format they want/need it in, or it has DRM on it, or it’s not available soon enough, or they can’t play it on the device they want.

      These are all rationalizations for the real issue which is that many people no longer value the work of content creators. Once piracy became cheap and easy people started to devalue the work of artists, musicians, film makers, writers and others whose work happens to be able to be easily pirated. Why should a plumber be paid for his time and effort, but a musician shouldn’t? If you like the content, you should support the efforts of the people who created it for you.

  3. David Schuetz

    A few comments.

    First, I’m not sure I’ve seen documentation that the Matched songs will be DRM-free. I believe all the tracks sold over the last year or so (since iTunes Plus became the default) are free of DRM, but I’d bet there’ll be controls on Matched songs. Mostly because, if you match your entire library of ripped vinyl, and then unsubscribe after a year, you’ve now spent $25 once. Putting DRM on them guarantees annual revenue. ;)

    How CDs are recognized when you rip them doesn’t have to do with an audio fingerprint, but with the structure of the CD itself. It’s a hash of the # of tracks, length of each track, and (I believe) even spacing between the tracks.

    • Thanks for the info about how iTunes recognizes discs. It appears I was incorrect about that. I’m surprised that method works as well as it does. Given the huge number of discs released, you would think there would be too much similarity between discs to make it work properly.

  4. Peter

    @Armando & nmancer61 – It has nothing to do with the meta data, as Chris says, it uses the “fingerprint”. It’s just like what Shazam does but instead of actually listening to the sounds it samples your files. It might use the meta data to verify its guess, but it would never be the primary source of the data since it’s too variable.

    The downside for pirates is that this is a subscription service. I have to assume once you stop paying, Apple is going to remove all the matched songs from your account. Since one reason people pirate music is because they don’t want to pay for it, I doubt they would be interested in continuing to pay for this service.

    • Armando

      @Peter, are you 100% sure that’s how it’s going to work. Seems like that would take a very long time to do, specially someone like me that has over 10,000 songs (250gb). I can’t imagine it would be a fast process? Also, this isn’t really a downside for pirates since they will be able to download high quality 256k music. I still believe their will be a flaw, even if it does “sample it”.

      • Peter

        Since it hasn’t been released yet, of course I’m not 100% sure. :)

        I used to work at a CD manufacturing facility and we had software that would “read” discs clients gave us and look for copyrighted music by creating a fingerprint for each audio track and matching it against a database of known songs and fingerprints. It could scan an entire disc in 2-3 minutes. Scanning from the hard drive is going to be even faster.

        When you rip a disc with iTunes how do you think it gets the artist and track information? It gets it by sampling the tracks, uploading the fingerprints and downloading the data. iTunes has never read CD-TEXT or other meta data from discs. It _might_ read ISRC codes from the disc, but I’m not sure, and very few discs are mastered with ISRC codes any more. Rip a disc without an Internet connection and it will call the songs “Track 1”, “Track 2”, etc… The information isn’t coming from the disc itself.

        Obviously the first pass through a large library is going to take a while, but using my previous example as a guide, if it takes 2 minutes to scan 10 songs (average album), it’s only going to take a few days to scan your 10K song library. Apple never said everything was going to be available to you immediately.

    • nmancer61

      Well I hope you are correct Peter. Shazam spectrogram analysis and other data is statistically better at finger printing music and a bit faster than uploading a song. Unfortunately if I remember correctly the algorithm for adding the meta data via CDDB or FreeDB is much more simplistic and prone to collisions, which happened quite frequently to me in the mid to late 90’s.

  5. I know a lot of people who systematically pirate music. Lets see what rewards they get from this service. 1. Streaming. (Meh…, Amazon does it for free. You get extra space for spending a few cents.) 2. Better quality. Well, I know of no pirates who has issues with quality. None ever complained that they could only pirate a 128Kbps version and it is not good enough for them. So lets not pretend that for a fee of $25.95 is a reward for pirates. When someone is so cheap (or such an asshole) to not buy albums, not support artists, they won’t pay the fee either as it gives them no benefits.

    As for people like me who buy MANY CDs, I love this. I will be buying CDs as long as I can as I like the display, I like the artwork and I like the physical form. But I would like to keep electronic copies (it just doesn’t fit my 64GB Macbook Air hard drive).

    We also should note that Match does not legalize piracy. I have very mixed feelings about this which I am almost reluctant to lay out, but here it is. If you pirate music, you still broke the law. It doesn’t matter if iTunes matched it for $25.95. It is still pirated and you are still responsible for your action. On the other hand I also have music on my computers that I might or might not have the rights to legally. For example, I lost the CD and have no proof of purchase. Do I have the rights to that music? How about, my friend handed me a CD: hey listen to this. I put it on my phone. Listen to it a few times. If I like it, I always buy it. If I don’t I delete it (as I do not need it). But in the interim, am I a pirate? A friends handed me one of his CDs to listen. Is that piracy? (Yes, put it on my phone for convenience.)

    So I hate the grey lines in the sand here.

  6. nmancer61

    I bet that iTunes Match will not be that rewarding. Especially, if it works as terribly as Ping. Ping appears to use the meta data in your music to match what is available in the iTunes catalogue. For example, I have “Les Paul and Mary Ford’s, How High the Moon” on one album compilation from Amazon, iTunes has the same song on a different album compilation in their catalogue. Ping will not allow me to ping the song “How High the Moon”. This appears because the albums don’t match. Even though this is only a missed up-sell financial opportunity for Apple/Ping it won’t be any missed financial opportunity for Music Match. What is worse, is that I have had this happen on songs I bought form iTunes, but are no longer in the iTunes catalogue. So, if Music Match works the same way it will be Music Maddening. As for pirated copies, every college students computer I’ve seen with pirated music has a none to little meta data associated with the music, so I believe the match rate will be very low.

    • At least some of the articles on MM have mentioned that it would look at the file’s “audio fingerprint”. In other words, it will look at the track itself, not the meta data.

      No telling how well this will work for tracks that I’ve digitized from my old vinyl LP collection …

  7. Armando

    If it scans your computer for .mp3 files, couldn’t you just create a fake album with static noise and have cloud match think it’s real? It’s not like it’s going to listen to each track to verify an audio match. Sound like it’s a pirates dream!

    • Ricardo

      Yes, it will scan each file and verify an audio match.
      This service wouldn’t work for me because I have a lot of original albums and a lot of pirated albums that are not on iTunes.