Digital Audio Insider -- the economics of music and other digital content

  digital audio insider


Digital Audio Insider is David Harrell's blog about the economics of music and other digital content. I write from the perspective of a musican who has self-released four albums with the indie rock band the Layaways.

My personal website has links to my LinkedIn and Google+ pages and you can send e-mail to david [at] thelayaways [dot] com.

If you enjoy this site, please consider downloading a Layaways track or album from iTunes, Amazon MP3, Bandcamp, or eMusic. CDs are available from CD Baby and Amazon.


Analog Industries
Ars Technica
Brad Sucks Blog
Broken Record
Digital Music News
Duke Listens
Future of Music Coalition Blog
LA Times Technology Blog
The ListeNerd
MP3 Insider
Music Ally
Music Machinery
Music Think Tank
The Music Void
New Music Strategies
Online Fandom
Pakman's Blog
Rough Type
Virtual Economics

The Big Picture
Core Economics
The Long Tail
Marginal Revolution
The Undercover Economist

17 Dots
Shake Your Fist
Sounds Like the 80s
Unleash the Love

January 2006
February 2006
March 2006
April 2006
May 2006
June 2006
July 2006
August 2006
September 2006
October 2006
November 2006
December 2006
January 2007
February 2007
March 2007
April 2007
May 2007
June 2007
July 2007
August 2007
September 2007
October 2007
November 2007
December 2007
January 2008
February 2008
March 2008
April 2008
May 2008
June 2008
July 2008
August 2008
September 2008
October 2008
November 2008
December 2008
January 2009
February 2009
March 2009
April 2009
May 2009
June 2009
July 2009
August 2009
September 2009
October 2009
November 2009
December 2009
January 2010
February 2010
March 2010
April 2010
May 2010
June 2010
July 2010
September 2010
October 2010
November 2010
December 2010
January 2011
February 2011
March 2011
April 2011
May 2011
June 2011
July 2011
August 2011
September 2011
October 2011
November 2011
December 2011
January 2012
February 2012
April 2012
May 2012
June 2012
August 2012
October 2012
November 2012
December 2012
January 2013
February 2013
March 2013
June 2013
August 2013
February 2014
March 2014
September 2014
December 2014
March 2015
October 2015
November 2015
December 2015

June 21, 2011

Some Details (and Questions) About Apple's iTunes Match Service
by David Harrell
iTunes Match image
A Chicago label is getting some attention for opting out of Apple's iTunes Match service. Numero's Ken Shipley also shared some financial details about iTunes Match in a comment to a recent Hypebot post on Numero's decision. Based on that information, we can make some assumptions about how the service will work:

1. Apple Is Reaching Out to Indie Labels
We know that all four major label groups are on board with iTunes Match, but it appears that Apple is contacting at least some indie labels directly to convince them to include their catalogs in the matching service.

2. A Match Is Enough
I had wondered if payments to labels might be based on the number of times a track was played. But the way Shipley describes it, if a track is contained in an iTunes library, that constitutes a "match," and a payment to the label.

3. The Per-Track Payouts Are Small (and Variable)
This was a given, of course. At $24.99 a year, there's simply not a lot of cash to share with labels. Shipley gives a figure of .0035 cents per match for a 5,000 track library, of which .0006 cents would be shared with the publisher of the song. However, I'm wondering if he meant .35 cents instead of .0035. Apple will share 70% of the $24.99 annual subscription fee, or $17.50 with labels. If you multiply 5,000 by .35 cents, it equals $17.50. Assuming that the payout is the larger figure, it'd still require 200 matches to equal the 70 cents that Apple pays for a 99-cent iTunes download. Though if the payout is based on the size of an individual user's iTunes library, the per-track amount will vary. Apple says it will support libraries of up to 25,000 tracks. If you divide $17.50 by that number, the per-match rate would be .07 cents.

4. Avoiding the "S" and "D" Words
At this point, no one seems to know for certain if matched tracks will be streamed by Apple to a device or if a match simply allows a subscriber to download the track. I thought the language on Apple's site suggested streaming, though I've read that it's a download, as Apple is worried that streaming would result in a huge bandwidth/data problem if iPhone users streamed their music collections all day.

According to Shipley's comments, Apple is avoiding both the "streaming" and "downloading" words because they don't want to be liable for current streaming rates or mechanical royalties.

We'll learn more details over the summer, but for now, here are a couple of unanswered questions:

1. A One-Time or Annual Payment?
Will a label receive a payment every year, as long as the track remains in a user's iTunes library? Given that subscribers pay the $24.99 maintenance fee each year, it seems more likely that it's an ongoing payment.

2. Is a Match Based Solely on Metadata?
While Apple has been lauded for coming up with a model that results in a revenue stream for music that might have been obtained illegally, that's a negative in Shipley's view. Whatever the quality/bit rate of the file on your hard drive, iTunes Match will upgrade it to 256k AAC file. Yet if the match is based solely on a music file's metadata, you don't even have to obtain the actual track -- you could simply change a file's metadata in iTunes or another program. It'd be a pain, but that with a few clicks and a bit of typing you could match any track in the iTunes catalog.

If you work for a label and can confirm any of the above, or have other details you're willing to share, please leave a comment or shoot me an e-mail. Thanks!

related: Some Quick Thoughts On iTunes Match


link 1 comments e-mail listen to the Layaways on Spotify

More Digital Audio Insider: Newer Posts Older Posts

Subscribe:   RSS Feed

Add this blog to, Digg, or Furl. Follow David Harrell on Google+.

The Digital Audio Insider Twitter feed:

    Digital music jobs: Looking to hire? Looking for a job? Check out the digital audio insider job board.

    Popular Posts

    A Long Tail Experiment
    By the Numbers: Using Statistics to Quantify Audience Devotion Owes Me Sixty Cents
    An Interview with Jonathan Segel of Camper Van Beethoven
    Price Elasticity of Demand for McCartney
    Sony and eMusic: What I Missed

    The Digital Pricing Conundrum series:
    Part One Part Two Part Three Part Four


    Out Now -- "Maybe Next Year" -- The New Holiday Album:

    <a href="">Joy To The World by The Layaways</a>

    "This is a sweet treat, deliciously musical without being overbaked for mass media consumption." -- Hyperbolium

    "Perfect listening to accompany whatever holiday preparations you may be making today." -- Bag of Songs

    O Christmas Tree - free mp3 lyrics and song details
    Away In A Manger - free mp3

    Download from eMusic, iTunes, Amazon MP3, or Bandcamp. Listen to free streams at

    album cover art from The Space Between

    <a href="">Keep It To Yourself by The Layaways</a>

    "...about as melodic and hooky as indie pop can get." -- Absolute Powerpop

    "Their laid-back, '60s era sounds are absolutely delightening." -- 3hive

    "...melodic, garage-influenced shoegaze." -- RCRD LBL

    Where The Conversation Ends - free mp3
    January - free mp3
    Keep It To Yourself - free mp3

    Download from eMusic, iTunes, Amazon MP3, or CD Baby, stream it at or Napster.

    album cover art from We've Been Lost

    <a href="">Silence by The Layaways</a>

    "The Layaways make fine indie pop. Hushed vocals interweave with understated buzzing guitars. The whole LP is a revelation from the start." -- Lost Music

    "Catchy Guided by Voices-like rockers who lay it on sweetly and sincerely, just like Lionel Richie." -- WRUV Radio

    Silence - free mp3 lyrics and song details
    The Long Night - free mp3

    Download from eMusic, Amazon MP3, or iTunes, stream it at, Napster, or Rhapsody.

    album cover art from More Than Happy

    "These are songs that you want to take home with you, curl up with, hold them close -- and pray that they are still with you when you wake up." -- The Big Takeover

    Let Me In - free mp3
    Ocean Blue - free mp3

    Download from eMusic, Amazon MP3, or iTunes, stream it at, Napster, or Rhapsody.

    More Layaways downloads:

    download the Layaways at eMusic download the Layaways at iTunes

    the layaways website