Cloud iTunes DESTROYS music business FOREVER!
Says man. We disagree...
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More hysterical shrieking reaches us about Apple's new music feature, I'm afraid.
Earlier this week a lone lawyer said that iTunes Match, which populates an online store with songs you already have, encourages infringement. Well, this one is even nuttier.
It's actually so spectacularly muddle-headed, I thought it might be is a good time to examine what did and didn't happen this week, briefly - so we can see through the hype to the reality.
Bob Lefsetz, the shouty publisher of the eponymous industry newsletter, is normally very critical of record labels - often for the right reasons.
"His intense brilliance captivates readers from Steven Tyler to Rick Nielsen to Bryan Adams to Quincy Jones to EVERYBODY who’s in the music business," he says modestly, on his own site. This week finds Bob barking furiously up the wrong tree. He thinks the labels have sold out the future record industry, in return for a one-off payment of a few dollars from Apple.
Writes Lefsetz:
"For approximately $40 million to the bottom line of each recording company, you know they’re not going to share the revenue with artists, the labels sold out their future.
It’s like Nintendo being paid a bunch of money to never develop the Wii.
It’s like Electronic Arts being paid to never develop mobile games.
It’s a denial of the future."
Silly Bob.
Paying for Apple's iCloud doesn't get you any music you don't already have - as we have pointed out a number of times already this week. If you want to hear a song you don't already have access to, you have a number of options. You're going to have to buy it, or rent it via a subscription service, or wait until it comes round on the radio, or find an unlicensed (aka "pirate") copy from the Torrents or Rapidshare, or a blog, or some other unlicensed source.
Or borrow a copy off a mate.
In other words, these are exactly the same choices you had before Monday's iTunes Match service was unveiled. The supply side is unchanged.
All iTunes Match offers us is a universal, multi-directional synchronisation option for our music collections, rather than the bi-directional PC to mobile option common today. Spotify already offers something similar today, but for around six times the subscription fee, you also get access to millions of songs you don't already own. (Which is then sync'd across multiple devices).
Why is Bob not complaining that Spotify is destroying the future of the music industry? Because it would be silly. But that proposition has more merit than positing that nobody will ever buy another song they don't already own. That's the only way Bob's argument can stand up.
I can't quite see why this would happen, or how iTunes Match would cause the greatest, and certainly unprecedented, shift in cultural demand patterns in human history.
Next page: Plus ça small change
COMMENTS
Pretentious hack
"The deal-breaker for me is that I really don't want my music, much of which was encoded very carefully, chewed up and spat back at me in AAC format."
As one of the team that originally developed the AAC format in the late 90s, I find pretentious opinions like this quite insulting. If you bothered to do some proper research you'd know the real consequences of encoding music with the AAC codec. A quality assessment such as "chewed up and spat out" is so wide of the mark it calls into question the credibility of your entire article.
FYI: I was a research scientist on the MPEG technology programme between 1998 and 2002, and worked exclusively in psychoacoustic modelling. And back at Philips NatLab we used to use the FYI acronym somewhat differently. Clue: the "i" stands for "idiot".
I like
I like Steven Tyler, Bryan Adams, Celion and hundreds more from symphony composers to hard rock. I'm a heart surgeon. Please tell me how listening to this music makes me mindless, or how you are in anyway qualified to call anything mindless. Or for that matter who are you to decide if someone is talented enough, and who deserves their 15 minutes of fame...or more. I like what Apple has done. I don't have to buy an entire cd with songs I do not like and instead can opt to buy the one song I do like. I like that I can sample music from iTunes from artists I've never heard of before, who are trying to make it, I like it when I find someone, or a song, I've never heard of and can download that song and it cost 99 cents to $1.27. I like even more that anything I have wifi / bluetooth setup on can receive the songs I did purchase. But what I like the most is that people, who you say, have no talent, do not need to use the music industry anymore and can instead use Apple to live their dream. Many have become known because of it.
Please clarify
Andrew, you realise that the uploading of content-to-Match isn't transcoding or reencoding, the audio is identified via fingerprint? After that, a copy of the AAC file (as available on iTunes), encoded from the label-supplied lossless master, is made available in your iTunes library through your Match account. There's no transcoding of MP3s, that'd be horribly inefficient and error-prone if metadata was wrong/missing etc. That's what I took from where you wrote about it "chewing and spitting out" AACs)... You may want to rephrase that to clarify.
For the handful of files it might not be able to identify from fingerprinting, it will upload the original files and then (I hope!) make those originals available from the cloud instead of transcoding to AAC. Transcoding would make no sense, and Apple (to be fair) are pretty anally retentive about audio quality through iTunes.
I work in the music industry in the independent sector, and I think - as Apple will have already carefully thought about and realised - that there will be a subset of customers who immediately attempt to use it to 'legitimise' their huge catalogue of unlicensed (read: shonky) MP3s. However, once they're locked into that $25-a-year model... Boom. Pure profit from that customer after year 1.
Far more importantly for labels, it's yet to be revealed what the actual base royalty rate will be as paid to labels whenever a customer is given access to a track through Match. Given a track sale through the iTunes store only yields (on average) 50-59p gross to the label, I suspect iTunes Match royalties will be comparabie to Spotify levels of royalty, which are an absolute pittance. (You have to get multiple hundreds of thousands of streams on Spotify to earn more than $100.)
I'm on the fence about Match at the moment. We could see another incremental source of revenue, but I guarantee it won't be a large amount (and lots of our catalogue has been pirated and shared online, particularly on filesharing blogs). We send out DMCA notices if we see lots of catalogue sprout up but we could send out hundreds a day and never get on top of the problem.
We'll have to see if Apple implements and enforces a FUP with regards to how many tracks you can fingerprint and get access to at once - the majors (whose favourable royalty rates haven't been disclosed, but still won't be amazing) will get really pissed off if the majority of Match customers use the service to basically download 128kbps (or lower!) MP3s then get a pretty-much-free upgrade to 256kbps, DRM free, A+ quality AACs. I know I'd be pissed off by that.
Mine's the one with a copy of the iTunes Music Store Style Guide handbook in it
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