This could be the biggest shock to the industry since the iPod, argues TuneCore. Photo (CC-BY-SA) strollers.

Jeff Price, writing for TuneCore, has a different take on Apple’s iCloud. He thinks it will both transform the industry and shift consumer listening from downloaded files to streams. That would mean I’d have to substantially revise my knee-jerk take following Apple’s announcement – and his line of thinking would raise questions about whether dividing up a $25-a-year fee will leave much of a revenue stream for artists.

Updated: Apple responded to NPR’s request for clarification. iCloud is not a streaming service. That invalidates a lot of the arguments on the TuneCore blog. My analysis earlier was based on the assumption that Apple was making iCloud music and iTunes match download-only.)

iCloud: A Music Industry Game-Changing Product

You can read Apple’s description of the product on their site. Correction: while TuneCore claims iCloud’s music functionality is streaming, Apple has only confirmed file sync capability – you play music from local storage. Indeed, Apple touts the ability to download and to listen to music matched on iTunes Match as 256k AAC files.
http://www.apple.com/icloud/features/

There are several observations in his piece worth highlighting:

  • Apple’s library sync, once you pay the fee, is automatic, says Price. (This much is correct.)
  • It’s a legal coup for Apple. Price notes that the same concept on MP3.com, back in 2000, earned RIAA lawsuits that shuttered the service in 2008. (This is also likely accurate, though we don’t know yet the terms of Apple’s negotiations. Removing streaming would simplify licensing greatly, but since iTunes Match can associate content that isn’t purchased with a file download, it’s safe to assume some sort of revenue sharing for that media. If that’s the case, it’s a huge step forward.)
  • Re-downloading uploaded files is possible only with Apple — and yes, that includes files you pirated. Price believes that this “provides the feeling of owning what you are streaming.” But that could be bad news for artists who depend on the “ownership” feeling coming from buying from stores like Bandcamp. Confirmed: Price is at least partially mistaken. Amazon allows re-downloading files, though it’s worth noting those are files you’ve purchased from the Amazon MP3 store — Apple’s functionality is indeed different. What’s entirely incorrect, based on the service in its present state, is the assumption that you stream files. While that’s true of Google and Amazon stores – and while those services might assist the kind of streaming preferences Price describes – Apple isn’t streaming, or at least isn’t doing so yet.
  • Price suggests that licensing fees could be a “pot of gold at the end of the digital music rainbow,” by creating revenue streams for plays of music, regardless of source. (That’s an interesting theory, but without specifics of how revenue sharing takes place, it’s unclear how big that pot is.)

Why would this transform the landscape? Two things: one being increased lock-in to Apple’s products, Price argues. While there’s no new DRM, the automatic download as AAC renders files incompatible with some non-Apple players. (I disagree here – AAC compatibility could simply become more widespread, and even now, it’s not limited to Apple.) I think sheer iCloud compatibility could increase Apple dependency, however – and to the iTunes store, too, which is essential to TuneCore’s business as a gatekeeper for unsigned artists.

The other half of the argument is more interesting an interesting description of a hypothetical service that is not iCloud in the state described by Apple:

Just as the original Napster trained people to download music and listen to it on their computers, Apple, due to its vast hardware proliferation (iPhones in particular) is in a position to shift consumer behavior yet again–this time from downloading music to listening to it via streams. And with this consumer shift, the music industry will reset itself once again until the next revolution…

The bottom line here is whether consumers buy in and adjust their listening habits. If they do, Price could be right – we could see a shift from downloads to streams, an income shift from purchases to royalties, and even greater dominance of Apple over how people consume music. Notably, because of the lack of licensing deals, Apple might be without competition. My big fear: those shifts could ultimately mean that only artists with lots of plays get revenues, which again would tilt the scales to big artists. The charts would simply be on your iTunes players, not on the radio. We’ll have to wait and see; stay tuned as I hear from more people close to the iCloud deals and product.

Updated – one last thought for the day. If you’re wondering how you can split up a $25-a-year fee and provide streaming, a simple answer may be, you can’t. It’s possible TuneCore is simply dead wrong, because it doesn’t seem that the math for licensing fees would add up. Apple, for their part, never mentions streaming.

But I am at least partly comforted in my fears about streaming becoming the norm at this absurdly-low price by the evidence that this isn’t a streaming service to begin with. Ahem.

Again, confirmed: Price is making an argument that appears to be divorced from the present facts, though it certainly remains possible a future version of the service will stream. (Given the service isn’t due out until the fall, it’s even possible the final version will ship with that functionality.) In his defense, the question of whether Apple’s service provided streaming seemed to confuse everyone. While it was the single most-anticipated portion of the WWDC keynote, Apple left demos and description to the end of a marathon set of demos of Mac OS and iOS features, and then showed a service that wasn’t complete. That has surprised some onlookers (see our comments), given that many people expect Apple to keep functionality under wraps until it’s fully baked. (Contrast: Google, who regularly release experimental and “beta” products.) Since Apple never specifically debunked rumors their service streamed, some people conflated rumors (and features of rival services) with what Apple showed. While TuneCore hasn’t posted an update to their blog, we’re blessed with the ability to post updates online. For now, the iCloud doesn’t stream. Price’s arguments remain a perspective worth considering because a future iteration might stream, and rival services make it a cornerstone feature.

  • RichardL

    Interesting take since iTunes-in-the-Cloud doesn't do streaming… at all.

    Also Tune Core is incorrect. Amazon Cloud Player does allow you to re-download music that you upload or music that you purchase from Amazon to multiple devices. 

  • F

    "We’ll have to wait and see; stay tuned as I hear from more people close to the iCloud deals and product."

    Most of them would probably have signed NDA's so they wouldn't talk about Apple's plans on streaming , if such thing is in their plans.

    All i can see is that every day that passes , things  gets "cloudier" for artists. If Apple adopts streaming someday soon , and follows Spotify's model, making a semi-living from your music will be over once for all. Micro-payments will be such as working one hour in a McDonald's will make you more money than an entire year of making music. 

    The whole iTunes store is already a loss leader for Apple ,anyway, to sell more iGizmos..

  • F

    Oh , and one other thing . Tunecore is more excited about streaming , because their business model ( 50 bucks a year)  benefits more from it than competitors who take percentage from your sales ( CDbaby , Awal , etc..). Imagine taking 9% out of 00000000000000000000000000.1 cent from streaming.

  • Peter Kirn

    @F: iTunes makes billions in revenue annually and hundreds of millions in profit. That's all leader, no loss. ;)

    Yes, people are under NDA and other obligations, not only about the product but about negotiations.

    However, I do expect that by tomorrow morning Apple may have resolved the question of whether this is a streaming service or not. Right now, national news outlets can't agree, and I typically don't expect an instantaneous response from Apple PR under the best of circumstances. 

    I stand by my other observations in today's rambling editorials and links; some of these issues are 10-15 years old. I also am willing to admit that a lot of information about this implementation we just don't know yet.

    And that cuts both ways… that's why Apple was able to mockingly put giant ????s around Google's Music beta, since the Googleplex hasn't revealed pricing.

  • http://www.synthtopia.com/ James Lewin

    Peter

    iCloud is not a streaming service, per NPR:

    http://www.npr.org/blogs/therecord/2011/06/06/137

  • http://micronaut.bandcamp.com Chris Randall

    Newsflash: Apple doesn't have to pay a license fee on music the user already purchased, and thus has a license for. Thus, there is no streaming "fee," and that $25 doesn't have to be divvied up among anyone. We don't get a piece of that. We got our 70% when the user bought the music in the first place. 

  • http://www.sensomusic.com nay-seven

    mm, i feel scary anyway…don't know why…;-)

    monopole and creativity was in a boat…

  • Peter Kirn

    NPR had earlier called it a streaming service. so that means they got the correction they were waiting for.

    Streams could theoretically net performing rights fees. There is still some royalty here, potentially, but we don't know yet what it is. stay tuned…

  • ChuckEye

    It's pretty clear that iCloud is NOT a streaming service, but indeed a storage locker. I've got 32,000+ songs in iTunes on my home machine. I don't mirror that to my iPod Touch, nor to my MacBook. (and if I had a MacBook Air, I'd have even less storage…) But if I pay Apple $25 a year, I can download any of the songs that they have (granted, I've go a lot of obscure stuff that ISN'T on iTMS), "on demand".

    Also, curiously, once I've registered those songs that Apple DOES have copies of, if I lost my machine due to some catastrophe, at least SOME of my library could be rebuilt at no additional cost.

  • rockyscience

    and music is starting to look like the family photo in marty mcflys wallet

  • ChuckEye

    @RichardL thanks for the heads-up. I doubt iTMS would have 25,000 of my tracks… I've got a lot of indie stuff, small label, or other CDs that I picked up over the years that will probably never make it to Apple. (Who knows how long the physical media will remain readable…) 

    And the highest percentage of questionably obtained material is probably live recordings from Archive.org and other taper-friendly band sites which wouldn't be showing up in iTMS anyway.

  • meh

    Streaming DOESNT work 

    where does the bandwidth come from to play back all these licensed or unlicensed songs all day? 

    your tiered data connection surely wont let you, it wont be ad supported, terrestrial radio has failed for that very reason of obtrusive ad's

    further streaming never solves the "on demand" problem we have grown accustomed to in the internet age. I want MY content NOW, not have to wait for it to circle around or repeat after another 20 minutes. Streaming is fine for Movies and TV, but not 5 minute songs, there's just no point, and our telco networks are no where near the speed to playback that much streamed data fast enough, we dont live in South Korea remember… 

    the keynote said WiFi syncing for your current unpurchased library happens on your home network, once your devices are persistently sync'd, a onesy / twosy download from the icloud is no big deal.

    no offense musicians, I'm one as well, if you want big money, learn to program a computer or go be a banker. Enough with the fake rock star mentality. Sherlock Holmes could play a damn good violin, but he got paid as a Detective…

  • RichardL

    @ChuckEye iTunes Match is limited to 25,000 songs (excluding tracks purchased from iTunes Store). 

  • Brian Tuley

    The cloud is nothing more than a way to wrestle control away from individuals and place it back in the hands of major labels and software companies.  This is just the tip of the ice burg with apple itunes.  Thanks but no thanks.  I'll continue to  purchase vinyl instead of downloads and CD's for the most part.  And I'll continue to archive my digital files to my own hard drive.  I think I can manage that on my own.

  • JonYo

    Brian T -

    I get where you're coming from, and am also always very leery of companies taking away my control over my devices and my media on those devices under the guise of convenience or shiny new features.  I'm also leery of where this sort of icloud / itunes combo could go in the future.  If streaming does start to become the norm, could future devices start to do away with large local storage to cut the costs of devices' aspects that start to seem "unnecessary" in the new popular consumer usage, effectively making us all totally dependent on the streaming services when most or all new devices will ONLY work via streaming?

    However, keep in mind that in the case of THIS current product launch, it's solely an additive thing.  It's not like you're going to sync to the icloud, and then go ahead and get rid of your local archive.  If the icloud/musicmatch service broke, or apple rescinded the whole thing, or whatever, it's not like you'd suddenly be without your music, or any of your former playback capabilities would be lost for you, you'd simply be back where you were before you got involved with the icloud service, all your media intact.

  • Bono Ono

    They are slowly taking computers away from the consumer. In the end the consumer gets a tabletgizmo for streamed entertainment but not a tool for production or taking away the mindcontrol from corporations. They are afraid of the people having fun starting stuff like Anonymous.

  • http://zeroreference@blogspot.com zeroreference

    DJ's seem to make decent money, they are meta-musicians of a sort. Maybe the true customer of the 'trad' musician isn't the listener anymore, but a third party, the way the real customer of Facebook is its advertisers, not its users.

  • http://zeroreference@blogspot.com zeroreference

    What is the sound of one keyboard typing?

  • http://ardour.org/ Paul Davis

    How to do "cloud music" yourself, for moderate techheads, in a few easy steps:

    1) get a decent home connection.

    3) use dyndns to establish a well known name for your dynamic home IP address

    2) install slimcenter (logitech/slimdevices open source server)

    3) install a slim client on some other device, or a neighbour's machine, or a friend's machine, or whatever

    4) point client at your home machine

    5) listen.

    in my specific case: 15,000 songs on home server (replicated twice on two other @ home machines), accessible anytime I'm on the road and have an IP connection. we have a verizon FIOS connection, around 15Mbps upstream, 1-2Mbps downstream, which will support 1-3 slim server streams.

    we also have 2 slim devices units here at home, one in our bedroom and one hooked up to the main house amp + speaker systems.

    thanks apple, but no thanks.

  • Random Chance

    @Paul Davis: It's not even that hard, you can get a whole bunch of free software to do the job. I've worked with someone who used to provide background music for some of the meetings we had using a server running on a GNU/Linux home machine. You could probably go one step further and just get one co-located server (or virtual server or whatever), possibly together with some other people, and make your own personal internet radio station. If the provider also has backup facilities in place for the rented machine you have a great way of backing up all those obscure music files. There's probably even a chance you can upload losless audio files and have the server convert them on the fly to something more amenable to streaming. Ah, the endless possibilities …

  • http://ardour.org/ Paul Davis

    @RandomChance: i am running slimcenter (which is FOSS) on a GNU/Linux machine :)

    my whole point was that for many people these days, their existing home IP connection has enough upstream bandwidth for them to use their own machine as their remote music server.

  • http://Mucca-pazza.org Andy

    iCloud has a lot more to do with Apple's hardware strategy than software or services. They did this to solve the problem of "what happens to our ecosystem when the personal computer is no longer the digital hub?"  in order to cut the cord from all our devices to our iMac or PC, Apple had to allow wireless sync. iCloud is the answer. For $25 a year you're getting a syncing service of tracks you already have, not streaming of Apple's entire iTunes library. You still have to add music to your library by ripping or buying from a retailer like iTunes or Amazon. Apple just enhanced the usability of their hardware ecosystem. 

  • Bendish

    I don't get it.

    Whats the point? Just download the music and transfer it to other devices. How much more instant do we want things? Am I missing something? Peter…your post headings are the funniest most bizarre things ever! Love em. So awesomely confusing. In a good way!

  • http://www.tunecore.com Jeff Price

    just give it time…. 

    jeff 

    TuneCore

  • OS

    @ zeroreference: "DJ’s seem to make decent money"

    Are you serious?

  • http://zeroreference@blogspot.com zeroreference

    What things will people pay for which resemble music? There is vinyl. Interesting that _how_ one consumes has such ever-growing repercussions….like choosing bandcamp (which, I thinkthink, artists profit off of more than this or iTunes?) over a bigger service…

    That localized music post the other day was incredible. Will people pay for it? People pay for live shows. What happens when live streaming becomes the norm, when remote live collaboration is possible? 

    Have musicians ever been financially better-off than actors? Are there any parallels, or contrasts with the transition from theater to film that we can see in this shift in medium for music? 

  • http://www.ipr.edu Christian

    Well, this isn’t a streaming service in the traditional sense. The way I understand it is users will be able to stream content to all their tech. devices (i.e. iPad, iPhone, PC, Mac). They must be building on the whole time capsle thing here; maybe storing content on an external drive connected to the web (speculation, of course). So – I’m pretty sure the streaming content comes from music or other kinds of digital creative a user has liscenses for. Can anyone speak to this?

  • http://www.ezekielhonig.com Ezekiel Honig

    At the risk of repeating something, the idea of music consumption moving from ownership to access has been touted for a while, albeit in specific circles perhaps.  It makes sense, even though it is so difficult to swallow from a "looking through records on your bedroom floor" perspective.  It's kind of inevitable, and what is the difference if all ownership means is access from different devices.  No object means no object.

  • http://regend.com Regend

    didn't eMusic have their system setup the same way? except it failed if an artists pulled the songs from the eMusic catalog then you couldn't re-sync. i have always felt that the whole concept of "cloud computing" is a farce. i have been able to upload and download files to a computer via http on the internet since 1996 and prior to that i used FTP. the ability to carry your files virtually have always existed although the delivery method has nice GUI interfaces now. i can see that apple wants to integrate devices with it's service that it is marketing as a "cloud" it's the new tech buzz word is also achieved. i don't think there is anything ground breaking by any of this since OS X and iOS are all Unix derivitaves utilizing tcp/ip to network. new costume for an old hag.

  • gio

    @ Andy: what you wrote makes a lot of sense

    People here seem to be focusing a lot on iTunes/streaming of music and forgetting that iCloud is also a way to sync applications across devices (for now limited to calendar, iwork, etc, but I am sure it will be expanded, after all the iCloud APIs will be included in the SDKs)

    Imagine: start a song in GarageBand on the iPad, then when you get to your MacBook, the song you started is already there to be continued. Also, I am sure in the future you will be able to share your documents with others via the cloud for collaboration. Nothing really groundbreaking, but everything is done for you automatically and FREE. For most users, this is a winning combination.

  • Peter Kirn

    @gio: That's correct, and something I think we'll see more of via competing APIs, from Google's new stuff baked into Android to Dropbox to iCloud and its developer APIs. It's all pretty new, but very interesting. Of course, for musicians, gets to be a bit of an issue with big sample libraries and whatnot, but for some things it'll be brilliant.