iCloud will be a hit for Apple

Recently, Apple came out with its Internet-based storage solution, iCloud. This is a very big and a very good deal.

I want to concentrate on one feature of iCloud, the iTunes in the Cloud product. Here’s the feature comparison that Apple has drawn up for iTunes in the Cloud.

Apple lost first mover advantage to Amazon and Google because it hammered out deals with the music labels for its digital music locker service, as these Internet-based services are called. Amazon and Google did not.

I am already using both Amazon and Google’s services on my Android phone and tablet as well as on my PC. For the most part, I am pretty happy with both – but I am still considering the Apple product. Why? ITunes Match.

Apple describes iTunes Match this way on their website:

If you want all the benefits of iTunes in the Cloud for music you haven’t purchased from iTunes, iTunes Match is the perfect solution. It lets you store your entire collection, including music you’ve ripped from CDs or purchased somewhere other than iTunes. For just $24.99 a year.

Here’s how it works: iTunes determines which songs in your collection are available in the iTunes Store. Any music with a match is automatically added to your iCloud library for you to listen to anytime, on any device. Since there are more than 18 million songs in the iTunes Store, most of your music is probably already in iCloud. All you have to upload is what iTunes can’t match. Which is much faster than starting from scratch. And all the music iTunes matches plays back at 256-Kbps iTunes Plus quality — even if your original copy was of lower quality.

The first reactions to this service were that Apple Has Just Monetized Pirated Content. Basically, if you were stealing content from the Internet on bittorrent, you now had a sure-fire way to legitimize that content in a way that allowed the record labels and the artists to share in the profit. Apple benefitted too of course. Personally, I think this is a genius move. A friend of mine wrote me that he agrees, explaining why:

Apple’s iTunes Match:

1. isn’t it essentially an amnesty that the labels are giving people who have downloaded all this stuff up to now illegally? They can get iTunes to match it and use it for free, from iTunes.
2. the data that people make available will allow for the first time a pretty exact data collection what the average % of illegal music/person/age group (or whatever other slice you want) is. Up to now it’s all guesswork and small sample stuff. Now it’ll be a huge data base from which to draw conclusions:
   • a) what % of people’s music today is from iTunes (legally), and what is not from iTunes
   • b) what’s CD quality on their iTunes (likely legal), and what’s mp3 format quality (likely illegal)
   • c) how will their music acquisition pattern change, going forward?
3. The music industry is making a bet that through cloud music there will be less ripping, less sharing of hard drives and DVDs, therefore allowing for this amnesty, in the hope that future revenue streams again become legal. Pretty compelling case, even if you have to give a ton of the margin away to Apple.

I agree with all of that. But here’s the thing: there’s a lot more to it than just piracy. Let me tell you about my own experience.

Just last week I was uploading music to my Amazon Cloud Player when the Amazon software failed on me. It was very annoying. I tried uploading my music multiple times – even letting the program run overnight. I uninstalled and reinstalled the software two times. Nothing. So I wrote Amazon:

I bought four mp3’s a couple of days ago. Since then, when I use the MP3 Uploader, it continuously compares my computer library to the songs already on the cloud and never stops. I can’t upload anything now.

This is very frustrating because I had a seamless experience before that. Can you help me fix this problem, even if it means deleting my entire cloud library?

They were quick to respond (good bonus points for that). And they gave me a bunch of suggestions that I had already tried. I called Amazon. They have a callback service on their site that calls you and puts you on hold with a customer service representative (more bonus points for that). The Amazon people gave me some pointers and I went to try them out. As I was getting this sorted, I figured out that the problem was that the Amazon software was getting hung up on about 40 corrupted files in my Music collection. It would try and upload these files and just get stopped cold.

Now I’ve been using iTunes for something like ten years. So when I pulled up these songs in iTunes, low and behold I discovered that most of them were ripped a long time ago when iTunes recommended ripping at 128 kbps because storage space was so dear back then. Now, iTunes defaults to double that speed due to the increase in iPod storage space and Amazon’s making non-DRM 256 kbps their default MP3 format in Amazon’s MP3 store.

I just pulled up my library and see that the first song and album added to my collection, 10,000 Maniacs’ “Verdi Cries” and “In My Tribe” were added in January 2004. I see that the whole album is still 128 kbps. In fact, I just saw that I have almost 7000 songs in my music library that are 128 kbps. That’s almost half my collection. There’s no way I am converting my collection to 256. I have converted a lot already and it’s ridiculously time-consuming. You get all sorts of duplicate files because the song and album names don’t match and then you have go and delete the duplicate and re-rip and overwrite with the right titles to keep from losing songs in your playlists. Basically, it’s annoying.

Apple will compare the songs on their servers to the ones in your music collection and if they have the song already, they will make their non-DRM 256 kbps version available to you on the cloud immediately. That’s huge! It has taken me days to transfer my collection to Amazon. I gave up trying to transfer the whole thing over with Google because the upload speed was so doggone slow. With Apple’s iTunes Match, like lightning, almost my entire collection will be available instantaneously and at 256 kbps. Would I pay $25 for Apple to do this for me? In a heartbeat. And I bet you there are hundreds of thousands of people out there just like me. Once we are customers of iTunes in the Cloud, we will stay customers. So Apple can count on that $25 check coming in every year. Suddenly, their one-off purchase business model has a huge additional subscription-based revenue stream.

I see the Apple’s iCloud as a very compelling product. When iTunes Match goes live, I will pay the $25 – and so will many others. This is a net positive for Apple because it adds a new robust and recurring revenue stream to their iTunes product.