Apple's 'Buy Your Way Out of Piracy' Office

At the WWDC Apple announced its iCloud suite of apps. One of them was ‘iTunes in the Cloud.’ This was a free service that allowed consumers who had purchased music through iTunes to download that music and sync in across multiple devices (including the iPhone, iPad and both Macs and PCs). This provided ease of access as well as a backup option for consumers. To be sure, both Google and Amazon have similar services. But those services required users to upload their music to their data centers; a time consuming process to say the least. Apple realized that what you needed to upload was a database entry rather than the entire digital content. Seems like a pretty obvious economy really.

But Apple went further. If I look at my own iTunes repository, it is full of old content I ripped off CDs some years ago. Without that Apple’s new service would not offer much. Google and Amazon would look better. Not surprisingly, Apple had thought about that. Rather than having that content uploaded, Apple did a deal with music publishers to scan that content and match it with the 18 million songs they already sell over iTunes. Then a consumer could get the same deal in terms of backup and syncing for that content. But for this stuff, rather than being free, Apple would charge $24.99 per year for access to it.

Now what is interesting here is that iTunes Match need not work for content ripped from CDs but will also work for pirated content. In that case, by subscribing to iTunes match, you can turn that content into legitimate content. In other words, you can buy yourself redemption.

Who is going to pay that? As it is a flat fee, I suspect that it will be those with the largest collections – pirated or otherwise; although Apple does limit this to 25000 songs. Those with smaller non-iTunes collections won’t bother. That means that Apple will be able to gather information on those sales and likely will allocate some share of their revenues to music publishers based on what they find. That information has probably been available for some years as Apple allowed you to scan your non-iTunes collection to add album art and the like. But what is interesting is that Apple may have a better monitor over new pirated content as it gets matched with their repository. That might present interesting privacy issues but not ones that consumers can readily complain about.

Of course, this also suggests that the redemption process may legitimize piracy even further. What happens if because of this, knowing that they are paying for music in some form, more people pirate copies and then match and download legitimate, DRM free versions? Perhaps both Apple and music publishers have decided that that is something they can live with. In which case, is a subscription model for music not far away? Perhaps this is a transition device that leaves consumers with the option of control over their content – something subscription models do not have – to ultimately get them used to giving up that control. And what happens when this model comes to include TV shows and movies? I guess that is a deal Apple has yet to broker.

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