What iCloud and Music Match Mean for the Piracy Fight

Icloud Logo ImageOn Monday, as part of its WWDC keynote, Apple made an announcement that not only sent shockwaves through tech circles but, to an equal degree, the copyright world.

Of particular interest to those interested in copyright is how iCloud works, or will work, with iTunes and music and music. On that front, Apple made two announcements, the first was that iCloud would make it easy to sync and download purchased music on all devices with the same iTunes account, a feature widely expected and non-controversial.

The second, however, was regarding its paid iTunes Match service which, for $25 per year, will allow users to match non-iTunes music they have in their library, including tracks ripped from CD, purchased from other vendors or downloaded illegally, and have that music replaced with high-quality official versions from the iTunes store that are also synced via iCloud.

As a result of this, iTunes Match has been called everything from amnesty for pirates, a laundering service for pirated music and even a surrender by the record labels on the issue of piracy.

However, a recent article by FastCompany (sent to me by Patrick O’Keefe) paints a very different picture of iCloud’s replationship to piracy. According to it, music executives, most of whom have already inked deals to make the service happen, are on board with the idea for many reasons including to recoup at least some money from pirated tracks, which were previously a total loss, and gain some analytics about what users are listening to and downloading.

More importantly though, labels view this as a way of getting pirates used to paying something, anything, for music again as they prepare to move to the next phase of music distribution, subscription services, which many hope will eventually replace individual sales as the primary way consumers pay for music.

But regardless of the future plans, iTunes Match has implications on the larger piracy fight, though they probably aren’t as great as some people think.

Not a White Flag, But a Different Attack

Historically, the record industry has not been the best tacticians when it comes to piracy. Not only did they famously sue thousands of individuals for file sharing, but they also let nearly four years pass between when they first filed suit against Napster and the launch of their first serious legitimate alternative.

However, in more recent years they have gotten a great deal more savvy about how to deal with piracy and far more creative. For example, the record labels’ close relationship with YouTube has not only opened up a new, often very lucrative, revenue stream but it also has had an impact on music piracy by giving would-be casual pirates a legitimate, free and convenient option for listening to music and watching music videos.

This is similar in many ways to services such as Spotify in Europe have also provided a quick music-listening fix for those who want to listen to a track as a trial or get a song out of their head.

The impact of this strategy is debatable because of so many variables at play, but a recent study found that music files were extremely rare on P2P networks, replaced instead by movies, software, pornography, etc.

The record labels have, in recent years, put a focus on developing services and relationships that beat piracy at its own game while still earning them revenue. Though they haven’t been able to turn around their sagging profits yet, there has definitely been a noticeable impact, at least among pirates.

All of this being said, piracy is not going away as an issue for the record labels, instead, it may even be growing in importance, especially during this period of transition.

Still Focused on Piracy

As recently as February Universal Music Group’s head of digital said that piracy was his company’s “biggest global issue.”

Piracy and traditional piracy enforcement isn’t going away for the record labels. Instead, they are finally integrating their piracy enforcement as part of a larger strategy, one that is designed to woo casual pirates back to the fold while trying to decrease the damage piracy does to their bottom line.

This continued focus on piracy has shown in the policy and lobbying efforts. The RIAA recently came out strongly in favor of the controversial PROTECT IP bill in the U.S., which will enable the blocking of suspected pirate website along with other piracy countermeasures. Though the record labels softened their stance in Australia, backing away from encouraging the disconnection of suspected pirates, they are still favoring other, unspecified, actions be taken against pirates.

If there was an actual “white flag” moment for the record labels on the issue of piracy, it came when the industry announced they were no longer suing individuals for file sharing. But what it really turned out to be was a change in tactics in the fight against piracy, one that steps away from a legal fight with individuals and one that targets distributors of unlawful content.

This focus is likely to continue because the success or failure of iTunes Match and iCloud will largely depend on how many former pirates it brings into the fold. If illegal options are too easy, too freely available and too widespread iTunes Match could, very easily, become nothing more than a piracy laundering service, one where pirates do little more than legitimize ill-gotten tracks.

In fact, theoretically, things could actually get worse with iTunes Match if legitimate customers decide it is cheaper and easier to pirate tracks and “launder” them through iTunes, actually costing them potential revenue with many customers.

To prevent this, as well as to set the stage for subscription services, record labels have to make sure that legitimate options are easier and better than illegal alternatives and part of that means engaging in at least some piracy enforcement.

However, that enforcement doesn’t have to come in the form of a war against individuals, something the record labels have already shown. It will instead be waged against sites and companies that make music available illegally. Targeting the distribution network of pirated music, not people obtaining and sharing it.

Bottom Line

So what does iTunes Cloud and iTunes Match mean for piracy enforcement. Something I’ve been saying on this site for a long time, that piracy enforcement can only be a part of a larger strategy. The record labels are seeing that and iTunes Match is as much a part of their anti-piracy strategy as their lawsuit against LimeWire.

There’s no silver bullet answer for the challenges the Web has created for copyright holders of all sizes. Surviving, let alone thriving, is going to involve a multi-pronged approach coupled with some significant risks.

The record labels are seeing that and are responding to piracy with a cohesive strategy that seems to be generating at least some positive results.

The movie studios, however, are still using record label tactics from the mid 2000s (at least in some cases), suing file sharers by the thousand in a campaign fraught with legal woes.

That being said, many of the movie studios are also growing wise too, working closely with Netflix to provide a cheap, on-demand and reliable service that can easily compete with pirate offerings in terms features, convenience and even price.

However, the movie industry, from a business standpoint, has different challenges it has to face online which may mean the models that may work for the record industry will need to be rewritten to work for them.

In many ways, they are in a similar position to the music industry, only the music industry has a long head start on tackling their issues.

2 comments
James Gowan
James Gowan

It seems to me that the 5 computer limit is key here. If a pirate legitimizes his stolen tracks with iTunes versions: the tracks are now tied to his iTunes account so he can no longer share that music around to his friends. Why? Because in order to share, the pirate has to also give his friends access to his iTunes account which he won't. They could easily take advantage and download music, apps, books, etc. against his credit card.
The pirate has to make the decision to finally have great quality music that can be had on 5 computers and 5 iOS devices that include all meta-data & album art completed — or to keep pirating. I think for many people how casually pirate, the benefits outweigh the free music.
Personally, I see how the songwriters and artists are getting screwed because none of the $25 annual fees will go in their pockets. But, I haven't been helping them out for years... my income is such that I have to buy USED from Amazon and just rip the music myself. I never buy new music CDs and I rarely buy from iTunes or Amazon digital copies.

James Gowan
James Gowan

It seems to me that the 5 computer limit is key here. If a pirate legitimizes his stolen tracks with iTunes versions: the tracks are now tied to his iTunes account so he can no longer share that music around to his friends. Why? Because in order to share, the pirate has to also give his friends access to his iTunes account which he won't. They could easily take advantage and download music, apps, books, etc. against his credit card. The pirate has to make the decision to finally have great quality music that can be had on 5 computers and 5 iOS devices that include all meta-data & album art completed — or to keep pirating. I think for many people how casually pirate, the benefits outweigh the free music. Personally, I see how the songwriters and artists are getting screwed because none of the $25 annual fees will go in their pockets. But, I haven't been helping them out for years... my income is such that I have to buy USED from Amazon and just rip the music myself. I never buy new music CDs and I rarely buy from iTunes or Amazon digital copies.

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