Buyers' get legit copies of their own record collections -- for a price

When Apple topper Steve Jobs unveiled the details of his company’s iTunes Match earlier this month, he hyped the service by slyly lauding its time-efficiency as superior to that of its competitors. But the most important element of this service — which will allow users to stream new versions of music they own from the company’s data storage system — was left unsaid.

Instead of uploading tracks into a cloud locker from a user’s computer — as do competing cloud services like Amazon’s Cloud Drive and Google’s Google Music — Apple’s Match will scan the songs in a user’s music collection, then offer unlimited access to the versions of those songs already in the company’s database for a $25 annual fee, split between Apple and the record labels. In doing so, iTunes Match, a function of Apple’s iCloud service, will make no distinction between music the user has legitimately bought online or ripped from a CD, and music that the user obtained through less-than-legal means. As a bonus, Apple is offering access to high-quality, 256 kbps versions of the songs in a user’s library, a substantial step up from the usually cut-rate copies procured through torrents and download sites.

Some see the service as a sort of “amnesty” fee for those who have illegally downloaded music. By signing on with Apple’s service, the labels are in effect receiving a smaller, after-the-fact compensation for previously bought or pirated music. (Apple says it will not share any info on customers’ libraries with third parties — including whether or not the music being matched has an appropriate digital watermark.)

It’s unlikely that labels ever will declare a permanent truce with music pirates, but their tacit cooperation here does seem to point to a shifting strategy in the war on unpaid-for music — one that’s especially ironic considering that My.Mp3.com, the site considered the forefather of cloud music storage, and which ran on a model markedly similar to Apple’s,was shuttered after being sued by the labels more than a decade ago.

Jeff Price, CEO of digital distribution site Tune Core, immediately blogged his praise of Apple’s Match technology for achieving the de facto monetization of pirated music. “The iCloud business model has created a way for copyright holders to make money off of pirated music without making consumers feel like they are paying for the music,” he says.

Others see the move as more capitulatory, and at least one label — Chicago indie soul outfit the Numero Group — has already chosen to opt out of Apple’s Match service.

Apple’s announcement incidentally came hot on the heels of a significant victory for copyright protection. In May, the labels reached a settlement in one of the biggest digital copyright-infringement cases of the past several years, with the now defunct file-sharing network LimeWire agreeing to pay $105 million in damages. Yet the victory in that case only points up the stickier forms that online piracy is taking.

The Recording Industry Assn. of America has long been vigilant in pursuing peer-to-peer file-sharing networks, but a less brazen threat can be found in such perfectly legal file hosting sites as Mediafire and RapidShare, which exist as hosts for the legitimate sharing of files, and can also be havens for unlicensed music downloads.

In its suit against LimeWire, the plaintiffs claimed that 93% of the site’s file-sharing traffic involved copyrighted material. That was enough, in the eyes of the courts, to find LimeWire liable in accordance with the 2005 Supreme Court decision against file-sharing network Grokster, in which it faulted the company for the volume of pirated content on its site, and its lack of action to mitigate it.

The amount of copyrighted music available for download on a site like Mediafire, for example, is often huge, and Google even axed the site from the “Autocomplete” function on its search page earlier this month, as it does with all sites it considers to be aiding piracy. Yet the site’s primary function is the legal storing of personal data, or sharing such noncopyrighted material as personal photos online. The site’s moderators immediately remove offending material as soon as a copyright infringement claim is made.

But the “finger-in-the-dike” nature of fighting online piracy makes such policing a Sisyphean task; as soon as one guilty party is taken down, a new one will likely have sprung up to take its place. Aside from playing a continuous game of whack-a-mole with offending files, it’s unclear what, exactly, the labels can do to stem the flow of unauthorized downloads.

ITunes Match seems to be a step in the direction of acknowledging that.

The future of online piracy may well on hinge the success of Apple and its competitors. The cloud model has yet to be embraced by a wider consumer base. Apple’s dominance in the digital music sphere gives it a distinct advantage in that arena, and the cooperation of the four major label groups removes the biggest operational challenge.

If consumers become acclimated to the idea of paying for access to music rather than paying for music ownership, many of the most contentious pirating issues of the past decade could become moot. While the $25 fees paid by Apple users will hardly be adequate compensation for the untold millions lost through Internet piracy over the years, it’s certainly better than nothing.

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