Apple Determines iTunes Match Royalties By Counting How Many Times A Song is Accessed

TuneCore president Jeff Price today wrote a blog post praising Apple's iTunes Match service for creating money "out of thin air" for copyright holders. iTunes Match launched with all the major record labels on board, but some small labels refused to participate over concerns the service was legitimizing music pirates.

Price disagrees:

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.

match
Price tells MacRumors that Apple keeps 30% of iTunes Match revenues for itself -- the same percentage the company keeps from the iTunes and App Stores. The remaining 70% is divided, with 88% going to record labels and 12% going to songwriters. The royalties are split amongst artists based on "how many times someone accesses your song" via iTunes Match and it doesn't matter if a song is matched or uploaded -- the royalty is paid either way.

Price and other record industry execs are thrilled with the iTunes Match service, and by extension, Apple. Not only are artists finally getting paid something for pirated music, but for legitimate song purchases they are getting paid twice. If a listener purchases a CD, rips it to their computer, and then uploads it to iTunes Match, the record company books revenue for both the purchase and the small cut they receive from iTunes Match.

Regarding other music services, Price says, Pandora or Spotify customers are "paying a fee to listen to Spotify's music collection." iTunes Match customers are "paying a fee to have access to [their] own music collection."

Top Rated Comments

CygnusTC Avatar
136 months ago
Crazy!

I like the part about "industry execs are thrilled with the arrangement". They get 88% and the poor artist gets 12% OF COURSE they are thrilled with this.
Score: 24 Votes (Like | Disagree)
Sky Blue Avatar
136 months ago
Someone should tell him it's not called iMatch.
Score: 24 Votes (Like | Disagree)
Rufuss Sewell Avatar
136 months ago
As an artist who lives primarily on music downloads, merch sales, and live performance, I can tell you every penny counts! We own our label so we'll get the whole 70% (one would hope.) On it's own the $18 or so we get from YouTube every month sounds paltry, but add in Pandora, Createspace, CDbaby, and countless other web based music services that are actually paying artists and it ends up paying the bills. Any movement in this direction is good for the artist... and in turn, good for music fans.
Score: 22 Votes (Like | Disagree)
Tones2 Avatar
136 months ago
This is one of those rare instances in the music industry where EVERYONE wins:

1) The consumer gets a full backup of all of their music, a quality upgrade of the library, complete access to their full library at any time, and possibly legitimate copies of pirated music, all for ONLY $25 year (a great deal). Plus, this is a CHOICE - they are no worse off than they had been if they choose not to.

2) The music industry and artist make money not only on the initial sale, but also now on previously pirated music and more money on each iTunes Match play for both. Money they would have never gotten otherwise.

3) Apple gets good PR, at least enough money to cover there costs of running this (I assume), or if not, increased sales for devices that use iTuns Match assuming it's a selling point

Now, if only the iTunes Match service itself worked 100% correctly......;)

Tony
Score: 21 Votes (Like | Disagree)
Kid A Avatar
136 months ago
I still don't see the point in iTunes match. If you've got songs ripped from a CD they must be on your Mac/PC, so just sync your iPad, iPhone and iPod touch once, and the music will be on all devices. Then continue to use the iTunes store.

some people have 100s of GBs of music. that's impossible.
Score: 14 Votes (Like | Disagree)
Anonymous Freak Avatar
136 months ago
Someone should tell him it's not called iMatch.

Tell the people who call the iPod touch the iTouch, while you're at it.... :grumble grumble:
Score: 14 Votes (Like | Disagree)

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