Apple's cloud music could finally make piracy pay

Jun 07, 2011 By RYAN NAKASHIMA , AP Business Writer

Apple Inc. CEO Steve Jobs on Monday introduced more than just a cloud storage system for songs that fans buy legitimately through iTunes. He unveiled a system that might finally get music lovers to pay for the songs they got through less-than-proper means.

Aside from offering to freely distribute new and old iTunes purchases on all of a user's devices, the Apple impresario unveiled "iTunes Match," a $25-a-year service starting this fall that will scan users' devices and hard drives for music acquired in other ways, store it on distant and allow them to access it anywhere.

The service acknowledges a well-known fact - that most music on , iPhones and iPads was ripped or swapped. Apple reached a deal that gives recording companies more than 70 percent of the new fees, addressing a dark secret that has crippled the music industry, and provides them with some economic payback.

Where Apple is able to identify and match songs from its 18 million-song database, it will transfer them into the user's iCloud, a storage area housed on servers, including those at a massive new data center in North Carolina.

"The chances are awfully good that we've got the songs in our store that you've ripped," Jobs said.

Where songs can't be identified - say of bootlegged concert recordings - users can manually upload them to the cloud and gain the same access.

Jobs called it "an industry-leading offer" compared with similar song-uploading storage services recently introduced by Amazon.com Inc. and Google Inc. The limit of "iTunes Match" is 25,000 songs, and the service will update lesser-quality song files to iTunes standards. ITunes purchases do not count against the limit.

Industry observers said the new service could translate into big bucks for both Apple and the recording companies.

Apple has about 225 million credit card-backed accounts on iTunes. If only 10 percent signed up for the convenience of accessing music they hadn't bought there, it could turn into more than $500 million a year in new revenue, said Jeff Price, CEO of TuneCore Inc., a company that helps independent artists sell their music on iTunes and other digital music outlets.

The best thing is that consumers get the sense that they're paying for convenience, not for things they already own, he said.

"It allows for revenue to be made off of pirated music in a way that consumers don't feel that's what they're paying for, and that's what I find fascinating about it," Price said.

Both the free and the paid cloud services address a pressing need - to access music, documents and photos that are now stored on various devices - without the need for connecting wires to a computer. Such syncing has been a headache for music fans.

"If you're a music fan, the greater the fan, the greater the frustration," said Eric Garland, the CEO of online media measurement company Big Champagne LLC.

Garland said that he expected " Match" would allow consumers to stream music to themselves if they have any Internet connection by the time it is released in the fall, a capability not mentioned in Monday's presentation.

Such streaming capabilities are part of the cloud services recently launched by both Amazon and Google. But those technology giants failed to come to an agreement with the recording labels.

Therefore, both of those services require users to upload music from their computer before playback, which can take hours depending on the size of one's library. Apple said it can match users' songs in the cloud in "just minutes."

Amazon and felt they didn't need that ability to launch their services, but they may soon find they do if Apple's service takes off.

Recording companies Warner Music Group Corp., Vivendi SA's Universal Music Group, EMI Group Ltd. and Sony Corp.'s Sony Music Entertainment are hoping their deal with Apple will bring those holdouts back to the table, said Eric Custer, a and entertainment lawyer with Manatt, Phelps & Phillips in Los Angeles.

"It may light a fire under them to now try and conclude those deals," he said.

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User comments : 11

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Steven_Avery
4.4 / 5 (7) Jun 07, 2011
This is complete and utter garbage. Ripped music is now "piracy"? Bullsh*t. Who the hell wrote this piece? Some shill for the music industry?

If I buy a cd, then I should be able to play the content of that CD on any device I choose so long as I'm not playing it for public consumption. I own the CD and the right to play the content of the CD under fair use guidelines. Therefore if I choose to encode that music to MP3 and play it on my ipod then I should be able to.

What this is is that the music industry wants to charge us for music we already have the right to play. Screw them and screw anyone that supports this farce.

I say people need to start pushing back HARD. It's this sort of heavy handed GREEDY bullpucky that makes people pirate in the first place.
Ojorf
1.2 / 5 (5) Jun 07, 2011
I think you missed the point of the article. It was not explicitly about piracy and also never stated that ripping was piracy.

"... offering to freely distribute new and old iTunes purchases on ALL of a user's devices ..."

There is no doubt that most music out there is pirated, this will make your library more secure and easily accessible as well as generating the income to compensate the record companies.
Bonkers
3.7 / 5 (3) Jun 07, 2011
What's the legal situation here?
Let's say I have 25,000 songs ripped from another's collection, then for $25 I get it all replicated in the cloud, and presumably onto my ipod also, with paid-up versions.
Are the original MP3's still then illegal, now i have legit duplicates for all of them?
looks like purchasing the rights for 0.1 cent each.

finitesolutions
2 / 5 (1) Jun 07, 2011
You want music? Tune into youtube.com . There is almost all the music you want there. Not the highest fidelity but OK. You can rip it to a flash memory also.
CSharpner
5 / 5 (2) Jun 07, 2011
Steve has a really good point. Everything you upload is subjected to more than a 70% extra charge to the music industry, whether your files are ligit or not. There's something fundamentally flawed there.

Changing subjects here: if you upload an illegal file, and this service replaces it with a DRM'd (or not) Apple higher quality version, is it now legal? Especially, presuming you're now paying for it with the fee that's about 400% what it could have been if Apple wasn't giving so much to the RIAA?
Lord_jag
not rated yet Jun 07, 2011
Sounds like a great deal! You give Steve Jobs $25 to do what you were going to do for free anyways.

And... for the money, he'll let you do what you were going to do 10 more times and then stop you from doing it ever again... Great deal!
El_Nose
not rated yet Jun 07, 2011
If I buy a cd, then I should be able to play the content of that CD on any device I choose so long as I'm not playing it for public consumption. I own the CD and the right to play the content of the CD under fair use guidelines. Therefore if I choose to encode that music to MP3 and play it on my ipod then I should be able to.


This is the basic arguement for open source coding. Unfortunately it holds no water in this example. While it is still legal to rip music you buy to other devices this wording was to circumvent the FACT that 90% of mp3's are pirated from as way back as napster, grockter gnuetella networks, and now torrents. I am not personally accusing you of using devious means to grow your music collection but being honest most of my music from college days was gotten from download of someone elses collection.

We are now leasing content that we buy. All media we buy is now a lifetime lease - except e-books which the lease can change while you are reading the book
Deesky
3 / 5 (2) Jun 08, 2011
addressing a dark secret that has crippled the music industry

Ha! Or is it all the superficial 'artists' and their same manufactured crap songs that might have something to do with it?

$25-a-year service starting this fall that will scan users' devices and hard drives for music acquired in other ways

Yes, please. And I'll also sign up for the iLobotomy service too!
Beard
not rated yet Jun 08, 2011
Why does music have to be an "industry" anyway? I don't want to pay labels, I want to pay artists that I like, or even better; donate to them. Direct downloads from artists themselves has rendered the old physical distribution paradigm obsolete. Music data is already post scarcity, adapt to future economics or perish. In this sense Apple is moving in the right direction by charging for convenience services instead of data. It's better than the "sue all of our customers until they do what we want" method.
Vendicar_Decarian
not rated yet Jun 08, 2011
"Sounds like a great deal! You give Steve Jobs $25 to do what you were going to do for free anyways." - Blasphemer

Forgive them Jobe, for they know not what they say.

Praise The Jobe. Praise the coming and going of him. Praise his iTunes for he and he alone is the creator of the iUniverse.
insignificant_fish
not rated yet Jun 13, 2011
apple products are for the mindless. Apple services are for the stupid.

there is nothing apple offers at a cost that cant be done for free.... vomit