iTunes Match Creates Money ‘Out Of Thin Air’ For Copyright Owners

The president of TuneCore Jeff Price published a blog post praising iTunes Match service for generating money "out of thin air" for owners of copyrights. Apple’s iTunes Match launched in partnership with all major recording studios, but some small studios refused to cooperate over concerns that the iTunes Match was legitimizing music piracy. He says:

“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”.

Price tells that Apple keeps 30 percent of revenue from iTunes Match for itself – the same percentage Apple keeps from App Stores and the iTunes. The remaining 70 percent is divided: 88 percent going to recording studios and 12 percent are going to songwriters. The royalties are divided among artists depending on how many times their songs (no matter uploaded or matched) were accessed via iTunes Match.

Price and other record industry executives are thrilled with iTunes Match. Artists are not only paid some money for pirated music, but are paid twice for legitimate song purchases. If a listener buys a CD, copies it to their computer and uploads it to iTunes Match service, the recording studio will receive revenue for the purchase and the small percentage from iTunes Match.

Price says that in other music services such as Spotify and Pandora, users are paying a fee for listening to service's music collection, while iTunes Match users are paying a fee for access to their own collection of music.