HOW ICLOUD COULD CHANGE EVERYTHING

Photo and Article by: Jeff Watkins

iCloud is here. Now what?

iCloud is here. More importantly for us in the music biz, iTunes Match seems to allow people to synch their music on all of their devices together for just $24.99. I think it’s safe that we should begin with the assumption that iCloud will be a game changer and prepare ourselves. If not, at least we learned something along the way.

Some background on the product…there’s two aspects of iCloud that affects musicians. iCloud for iTunes will automatically synch music bought directly from Apple to all of your devices (MacBook, iPhone, iPad). Cool for fans, but my guess is that Apple wouldn’t let go of their traditional $0.33/song fee and doesn’t change much for the creators of that music. iTunes Match takes all of your existing music (whether you bought it on iTunes, ripped it from a CD, or obtained it in some other form), loads it into iCloud and synchs it with all of your devices so that you can access it anywhere, anyhow. If the major labels did well in negotiating license deals for this, iTunes Match should lead to a new revenue stream for artists. Details on how much (if anything) you’ll make will probably come later.

As a fan… this is amazing. I hate having to manage all of my music over multiple devices. I would love to go to a streaming service like Rhapsody, but I want what feels like my music and I don’t want to pay $9.99/month for something that I’d lose if I ever stop paying them. iTunes match seems to use my music, is way cheaper, and I wouldn’t lose the music if I stop paying, just the service.

Apple continues to change paradigms. I believe iCloud and iTunes Match could shift fans’ perception of what they want from their music by delivering something different in a clean manner. Just like tablet competitors have benefited from Apple’s iPad, music cloud services like Rhapsody, Pandora, and Google could grow as the music cloud industry gains some exposure.

So what does this mean for the indie musician? All of a sudden, knowing the revenue structures of various forms of cloud services could be more important. At the moment, cloud services like Rhapsody and Pandora don’t make up a huge chunk of a lot of band’s income. If Apple can change the public’s perception of cloud music services, a larger percentage of your monthly check could be coming from one of them (and depending on how well the record labels negotiated with Apple, hopefully you’ll be getting an added check from iTunes Match). You need to make sure your music is there to be listened to and that you’re set up to receive money you’re entitled to.

iTunes Match

No idea if they’ll be paying artists and songwriters or how much if they do. However, make sure you’re set up just in case. Sounds like Apple has done all of the legwork for you. If you’re on iTunes, you’ll be on iTunes Match. Digital Distribution companies like CD Baby, IODA, inGrooves, and TuneCore will get you there. Shop around to find the service best for you. For songwriters, make sure you’re on Harry Fox.

Subscription Streaming Services (ie. Rhapsody)

Streaming services pay you a percentage of their monthly revenue based on how many times you are played. You’re looking at a % of a cent per play, but they can add up, especially if the added attention from iCloud increased their revenue.

Once again, sign up for a digital distribution service and Harry Fox.

Online Radio (Pandora and Live 365)

Royalties from these types of services are mandated by law and are MUCH simpler for the artist. Just sign up with SoundExchange and you’re good. If you’re not signed up…you don’t get any money, even if 1,000,000 people listen to your song.

If you’re a songwriter, make sure you’re part of ASCAP, BMI or SESAC so that you’re paid the publishing share for online radio streams.

Locker Services (mSpot, Google, Amazon)

To be honest, how can these survive after iTunes Match? Apple has made their system so much simpler that I can’t imagine these will exist much longer, but who knows. These are basically just big external hard drives in the sky that you take 2 days to upload your music to. As Larry Kenswil pointed out at SF MusicTech, the artist gets nothing from this and is just for the convenience of the fan. Compared to Apple’s announcement today, these already look a little outdated and just don’t provide enough other than cheap storage. Don’t worry about these since they won’t pay you anyway, unless you want to cheaply store all of those songs you got off the Pirate Bay.

I know this is a lot of information if you’re starting from scratch. Hopefully most of you have set up a lot of this and are getting the money you deserve and are serving your fans well by being where they are going. I’ll get more details in upcoming INDIE CHECKLIST segments to help you guys set yourself up better in the digital landscape. Until then, I’d love to hear your guys’ thoughts either on here, twitter, or Facebook about how you think Apple’s announcement today will affect you as a musician and you as fan!

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