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iTunes Match generates 'magic money' for music copyright holders

post #1 of 37
Thread Starter 
As the first iTunes Match royalties trickle in, online music distribution company TuneCore says that the service created money "out of thin air" as it monetizes music whether pirated or not.

In a blog post on Wednesday, TuneCore President Jim Price announced that he received over $10,000 for the first two months of participation in Apple's iTunes Match, a fee-based cloud service that allows users to stream or download any song in their collection from the iTunes library regardless of its origin.

Price explains that the more times a song is re-downloaded or streamed, the copyright holders of that track get paid.

"iMatch (sic) monetizes the existing behavior of the consumer for copyright holders and artists," Price writes. "Consumers don’t need to do anything new­—they just need to listen to their pre-existing music."

When a user signs up for Apple's $25 per year music matching service, their computer's catalog is scanned and any songs that are available on iTunes are then made available for streaming or re-download through iCloud on demand. If a song in a user's library is not in iTunes, subscribers have the option to upload that track to iCloud for streaming and syncing.

"A person has a song on her computer hard drive. She clicks on the song and plays it. No one is getting paid," Price says. "The same person pays iTunes $25 for iMatch. She now clicks on the same song and plays it through her iMatch service. Copyright holders get paid. Same action, same song, one makes money for the copyright holder, and one does not. This is found money that the copyright holders would never have gotten otherwise."


TuneCore President Jeff Price.


Apple's iTunes Match debuted in the U.S. in November, 2011, and was followed by an international rollout in December. As of January, the service has been activated in a total of 37 countries.

[ View article on AppleInsider ]
post #2 of 37
Quote:
Originally Posted by AppleInsider View Post

As the first iTunes Match royalties trickle in, online music distribution company TuneCore says that the service created money "out of thin air" as it monetizes music whether pirated or not.

In a blog post on Wednesday, TuneCore President Jim Price announced that he received over $10,000 for the first two months of participation in Apple's iTunes Match, a fee-based cloud service that allows users to stream or download any song in their collection from the iTunes library regardless of its origin.

Price explains that the more times a song is re-downloaded or streamed, the copyright holders of that track get paid.

"iMatch (sic) monetizes the existing behavior of the consumer for copyright holders and artists," Price writes. "Consumers dont need to do anything new*they just need to listen to their pre-existing music."

When a user signs up for Apple's $25 per year music matching service, their computer's catalog is scanned and any songs that are available on iTunes are then made available for streaming or re-download through iCloud on demand. If a song in a user's library is not in iTunes, subscribers have the option to upload that track to iCloud for streaming and syncing.

"A person has a song on her computer hard drive. She clicks on the song and plays it. No one is getting paid," Price says. "The same person pays iTunes $25 for iMatch. She now clicks on the same song and plays it through her iMatch service. Copyright holders get paid. Same action, same song, one makes money for the copyright holder, and one does not. This is found money that the copyright holders would never have gotten otherwise."


TuneCore President Jeff Price.


Apple's iTunes Match debuted in the U.S. in November, 2011, and was followed by an international rollout in December. As of January, the service has been activated in a total of 37 countries.

[ View article on AppleInsider ]

Now if they would just take the money and shut up.
post #3 of 37
Quote:
Originally Posted by cbrownx88 View Post

Now if they would just take the money and shut up.

Why? You think he revealed an unknown side effect of iTunes Match?
post #4 of 37
Quote:
Originally Posted by cbrownx88 View Post

Now if they would just take the money and shut up.

I wonder if I'm the only one who has a problem with this. What's really happening is that people are paying multiple times to listen to music they already own (assuming it's not pirated). When it comes to paying Apple for that service, that's fine. After all, you're paying for convenience and to help Apple defer the costs of providing the service. At least, that's what it's supposed to be. It turns out that what's actually happening is copyright owners are getting paid EVERY time someone listens to the music they've already purchased.

Think about that. You buy a track for $1.39. You listen to that track 100 times in a year through the cloud. Why the hell does the copyright owner get money for that? You bought a license to listen to that track whenever you want to. And now, just because you're paying Apple for the ability to listen to that track in the cloud, the copyright holder gets another cut?

Thoughts?
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post #5 of 37
Quote:
Originally Posted by SDW2001 View Post

I wonder if I'm the only one who has a problem with this. What's really happening is that people are paying multiple times to listen to music they already own (assuming it's not pirated). When it comes to paying Apple for that service, that's fine. After all, you're paying for convenience and to help Apple defer the costs of providing the service. At least, that's what it's supposed to be. It turns out that what's actually happening is copyright owners are getting paid EVERY time someone listens to the music they've already purchased.

Think about that. You buy a track for $1.39. You listen to that track 100 times in a year through the cloud. Why the hell does the copyright owner get money for that? You bought a license to listen to that track whenever you want to. And now, just because you're paying Apple for the ability to listen to that track in the cloud, the copyright holder gets another cut?

Thoughts?

From the story yes they are, but Apple pays that you dont. Its the cost of the service that you have already paid for.
post #6 of 37
Quote:
Originally Posted by SDW2001 View Post

I wonder if I'm the only one who has a problem with this. What's really happening is that people are paying multiple times to listen to music they already own (assuming it's not pirated). When it comes to paying Apple for that service, that's fine. After all, you're paying for convenience and to help Apple defer the costs of providing the service. At least, that's what it's supposed to be. It turns out that what's actually happening is copyright owners are getting paid EVERY time someone listens to the music they've already purchased.

Think about that. You buy a track for $1.39. You listen to that track 100 times in a year through the cloud. Why the hell does the copyright owner get money for that? You bought a license to listen to that track whenever you want to. And now, just because you're paying Apple for the ability to listen to that track in the cloud, the copyright holder gets another cut?

Thoughts?

why do i think you sounds like consumer have to pay for all that times? cos consumers have to pay only once when they buy a song and apple is paying to the copyright owners for that many times not consumer…

my way or the highway...

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post #7 of 37
Quote:
Originally Posted by SDW2001 View Post

And now, just because you're paying Apple for the ability to listen to that track in the cloud, the copyright holder gets another cut?

Thoughts?

This appears on the face of it to be an amnesty, allowing the pirated libraries users might have to be one time brought into their "current valid songs" list.

I can foresee that after a period of time the "amnesty" may go away, and as there is a "better" managed version of your songs, the ability to play your old "pirated or cd sourced" music may be hampered.

Another direction that may occur is that the music that is presently not available and on iTunes, will not be known about unless a service like iMatch determines a "Demand".

what better way to bring more producers into the fold than to say "Oh hi, we're apple, we happen to have a bajillion copies of your new song being uploaded to our iMatch service, so we thought we'd give you some money. We don't presently have a distribution agreement with you, care to supply your catalogue to us and get more money?"
post #8 of 37
Quote:
Originally Posted by SDW2001 View Post

Think about that. You buy a track for $1.39. You listen to that track 100 times in a year through the cloud. Why the hell does the copyright owner get money for that? You bought a license to listen to that track whenever you want to. And now, just because you're paying Apple for the ability to listen to that track in the cloud, the copyright holder gets another cut?

Thoughts?

The iTunes Match service have 3 states for songs put in the cloud: Purchased, matched and uploaded. I think only matched song is concern here.
post #9 of 37
Quote:
Originally Posted by JBFromOZ View Post


I can foresee that after a period of time the "amnesty" may go away, and as there is a "better" managed version of your songs, the ability to play your old "pirated or cd sourced" music may be hampered.

I don't think so, as iTunes Match basically legitimizes anybody's music collection and you can even swap your crappy, pirated, bad quality version with a higher quality AAC from Apple.
post #10 of 37
Quote:
Originally Posted by JBFromOZ View Post

This appears on the face of it to be an amnesty, allowing the pirated libraries users might have to be one time brought into their "current valid songs" list.

I can foresee that after a period of time the "amnesty" may go away, and as there is a "better" managed version of your songs, the ability to play your old "pirated or cd sourced" music may be hampered.

Another direction that may occur is that the music that is presently not available and on iTunes, will not be known about unless a service like iMatch determines a "Demand".

what better way to bring more producers into the fold than to say "Oh hi, we're apple, we happen to have a bajillion copies of your new song being uploaded to our iMatch service, so we thought we'd give you some money. We don't presently have a distribution agreement with you, care to supply your catalogue to us and get more money?"

eg AC/DC, I uploaded all my ripped CD's to iTunes Match.

This should work for Google's pirate music service, i.e. rip the MP3 from a Youtube clip (which seems a popular way of acquiring free music these days), import to iTunes and upload to iMatch.
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post #11 of 37
Quote:
Originally Posted by hill60 View Post

eg AC/DC, I uploaded all my ripped CD's to iTunes Match

Yeah, I noticed that iTunes don't have AC/DC albums as they were in the few songs I had to upload in my collection. Other than that it matched 6200 tracks. Which I have redownloaded twice now in higher quality (51gb in total each time) onto my MacBook Pro and iMac.
post #12 of 37
So Apple is paying the copyright holders from Match revenue. Do you think Apple would be giving up a single cent of that income to record companies if it didn't have to?

Match basically legitimises pirated music. That isn't a good thing from the perspective of a record company. Apple had to give the record companies some fairly significant incentive in order to get them on board for this. If Apple doesn't pay them then there's nothing in it for them, so they wouldn't allow their catalogues to be used.
post #13 of 37
Quote:
Originally Posted by hill60 View Post

eg AC/DC, I uploaded all my ripped CD's to iTunes Match.

This should work for Google's pirate music service, i.e. rip the MP3 from a Youtube clip (which seems a popular way of acquiring free music these days), import to iTunes and upload to iMatch.


It is a lot easier just to download a good quality file in the first place.

None of this would be an issue if mp3 players still came with gobs of disk space, like they used to with mechanical drives.

Within the next several years, it may be less important to store things in the cloud, if TBs (or even hundreds of gigs) of storage become available in your pocket device.
post #14 of 37


When is iTunes and iTunes Match service coming to Asia? It's so sad that the services are available in so many countries but almost non-existence in Asia.

Com'on, there are consumers in Asia who do support legitimate music if such services are make available to us.
post #15 of 37
Quote:
Originally Posted by Euphonious View Post

So Apple is paying the copyright holders from Match revenue. Do you think Apple would be giving up a single cent of that income to record companies if it didn't have to?

Match basically legitimises pirated music. That isn't a good thing from the perspective of a record company. Apple had to give the record companies some fairly significant incentive in order to get them on board for this. If Apple doesn't pay them then there's nothing in it for them, so they wouldn't allow their catalogues to be used.

Any decent corporations will... And I am sure Apple will, even if record labels didn't ask for it. That's how a healthy ecosystem can be build and sustainable.
post #16 of 37
Quote:
Originally Posted by SDW2001 View Post

Think about that. You buy a track for $1.39. You listen to that track 100 times in a year through the cloud. Why the hell does the copyright owner get money for that? You bought a license to listen to that track whenever you want to. And now, just because you're paying Apple for the ability to listen to that track in the cloud, the copyright holder gets another cut?

and?
You listen to the same hit song on the radio 14 times a day. The artist gets a cut for every time you hear it. Then you hear it again 5 years later, The artist gets paid again. and again and again.
post #17 of 37
Quote:
Originally Posted by Euphonious View Post

So Apple is paying the copyright holders from Match revenue. Do you think Apple would be giving up a single cent of that income to record companies if it didn't have to?

Match basically legitimises pirated music. That isn't a good thing from the perspective of a record company.

Since the record companies were getting absolutely nothing (from the pirates) before iTunes Match and now they are, how is that not a good thing?
post #18 of 37
there is a solution for this, you can ask your bank to provide you to access your card in U.S which is what i have done… i'm in china and can use U.S store accounts with my credit card and most of the purchases i do by using iTunes gift card….

my way or the highway...

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post #19 of 37
Quote:
Originally Posted by chaicka View Post



When is iTunes and iTunes Match service coming to Asia? It's so sad that the services are available in so many countries but almost non-existence in Asia.

Com'on, there are consumers in Asia who do support legitimate music if such services are make available to us.

there is a solution for this, you can ask your bank to provide you to access your card in U.S which is what i have done i'm in china and can use U.S store accounts with my credit card and most of the purchases i do by using iTunes gift card.

my way or the highway...

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my way or the highway...

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post #20 of 37
Quote:
"A person has a song on her computer hard drive. She clicks on the song and plays it. No one is getting paid," Price says.

Complete crap. I bought the song that is on my harddrive. The artist was paid! Wanting to be paid a second, third, forth, ... time is just pure greed.
post #21 of 37
Quote:
Originally Posted by Apple ][ View Post

you can even swap your crappy, pirated, bad quality version with a higher quality AAC from Apple.

...that your friend has.

That's what you meant to say, right?
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post #22 of 37
Quote:
Originally Posted by Orlando View Post

Complete crap. I bought the song that is on my harddrive. The artist was paid! Wanting to be paid a second, third, forth, ... time is just pure greed.

'Pure greed' is a little strong. Virtually everybody has music in their collection they never paid for. Ever since the audio cassette this has been true. 25 bucks a year to legitemize this 'copied' music
is more than fair. 25 bucks for having all my music safely stored away and always available is also fair. That I can share my music and stream it to any of my devices at any time is also pretty sweet. It's a great service / feature / deal.
post #23 of 37
Quote:
Originally Posted by Euphonious View Post

So Apple is paying the copyright holders from Match revenue. Do you think Apple would be giving up a single cent of that income to record companies if it didn't have to?

Match basically legitimises pirated music. That isn't a good thing from the perspective of a record company. Apple had to give the record companies some fairly significant incentive in order to get them on board for this. If Apple doesn't pay them then there's nothing in it for them, so they wouldn't allow their catalogues to be used.

if my memory serves me correct; APPLE gets NOTHING from the Match fees- this goes directly to the record co. and producer and songwriters of the content and not based on the replay or the downloaded content but the iTUNES MATCHED files ONLY!!! they pay this fee out APPLE GET NO $$$ from this - it was an agreed fee with the recording industry and APPLE as a way to get $$$ out of this - apple has a BIZZILLION users with their ecosystem and this was a guaranteed revenue stream for the record companies and they agreed to it plain and simple. if millions of ios users pay the iTUNES MATCH fee imagine how much the record co's are making - when they weren't getting ANYTHING before??? it a WIN WIN- google it-- its all there (or BING it, i am not trusting GOOGLE much these days)

you welcome.. by the way..
BITZANDBITEZ at ya service..
post #24 of 37
If I were the record companies I'd be thinking it's not such a bad idea to freely distribute low-quality copies of songs, hoping they get sucked into iTunes Match and replaced with high-quality downloads that Apple pays a royalty for. Apparently Apple has to pay royalties per download even though the users pay a flat subscription fee. Apple bets the total subscription income covers the royalty expense.
post #25 of 37
Quote:
Originally Posted by I am a Zither Zather Zuzz View Post

It is a lot easier just to download a good quality file in the first place.

None of this would be an issue if mp3 players still came with gobs of disk space, like they used to with mechanical drives.

Within the next several years, it may be less important to store things in the cloud, if TBs (or even hundreds of gigs) of storage become available in your pocket device.

My god... Really?

Sorry, but everything is moving toward cloud computing; there is little or no reason for that much local storage for most if any users. You seem to be under the false assumption that 3G and cloud server technologies have reached their apex.
post #26 of 37
Quote:
Originally Posted by bitzandbitez View Post

if my memory serves me correct; APPLE gets NOTHING from the Match fees- this goes directly to the record co. and producer and songwriters of the content and not based on the replay or the downloaded content but the iTUNES MATCHED files ONLY!!!

If my memory serves me correctly (from previous articles) , Apple keeps about 20% (for hosting everything) and the rest goes to record companies.
However, none of this is verified as Apple and record companies have not released these specific details.
post #27 of 37
Quote:
Originally Posted by paxman View Post

25 bucks for having all my music safely stored away and always available is also fair. That I can share my music and stream it to any of my devices at any time is also pretty sweet. It's a great service / feature / deal.

You are confusing paying for storage / network costs (which is fair) with music companies trying to charge twice (which is not fair).

If you buy a CD, should the music labels get a fee each time you press play on the CD player?
post #28 of 37
I read it as the record companies get paid every time you download or stream the song. That's not the same as every time you listen, except in the one case where you stream it every time. But Apple's devices are more designed around storing the music on the device.
post #29 of 37
Quote:
Originally Posted by chaicka View Post



When is iTunes and iTunes Match service coming to Asia? It's so sad that the services are available in so many countries but almost non-existence in Asia.

Com'on, there are consumers in Asia who do support legitimate music if such services are make available to us.

I live in Hong Kong and I use iTunes Match through the US store. I love it, and the fact that the more I use it, as opposed to listening from a hard drive, the more copyright owners get paid, makes me want to use it even more. I already gave Apple my $25, let's share the wealth with the copyright owners!
post #30 of 37
Quote:
Originally Posted by SDW2001 View Post

Think about that. You buy a track for $1.39. You listen to that track 100 times in a year through the cloud. Why the hell does the copyright owner get money for that? You bought a license to listen to that track whenever you want to. And now, just because you're paying Apple for the ability to listen to that track in the cloud, the copyright holder gets another cut?


I'm sorry, who gives a s**t where the money is going? If your collection is completely legit and yet the money you pay for iTunes Match is going to pay the copyright licence holders, great news! I'm paying for the service because I want all my songs in the cloud. It does that, so I am getting what I pay for.

A lot of money you pay for products go to other places in a roundabout way... Such as money you paid for your iPad probably goes to pay off legal expenses in patent cases. Are you not going to buy an iPad because Samsung may end up with some of your money?
post #31 of 37
Quote:
Originally Posted by Orlando View Post

You are confusing paying for storage / network costs (which is fair) with music companies trying to charge twice (which is not fair).

If you buy a CD, should the music labels get a fee each time you press play on the CD player?

Yeah, but its not like that fee is coming out of your pocket. It is coming out of the pocket of the company that designed the device with the play button. Without the content that causes you to want to press that play button repeatedly, the device maker wouldn't have a product to sell. The content that causes that that device to get the most use and therefore driving up demand should get a portion everytime that button is pushed. It is a great incentive for artist to make better music. The better your song is, the more it gets played, the more it gets played, the more you get paid. Sounds like sound economics to me, and a fair system.
post #32 of 37
Quote:
Originally Posted by Orlando View Post

If you buy a CD, should the music labels get a fee each time you press play on the CD player?

If it is in a public place, as part of a business, then they already do.
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post #33 of 37
Quote:
Originally Posted by SDW2001 View Post

I wonder if I'm the only one who has a problem with this. What's really happening is that people are paying multiple times to listen to music they already own (assuming it's not pirated). When it comes to paying Apple for that service, that's fine. After all, you're paying for convenience and to help Apple defer the costs of providing the service. At least, that's what it's supposed to be. It turns out that what's actually happening is copyright owners are getting paid EVERY time someone listens to the music they've already purchased.

Yes, but think about it this way. If you were to buy web hosting for your music collection, in order to stream/download it to your devices while mobile, it would cost you a lot more than $25/yr. And you'd be liable for the resulting piracy if your security isn't good enough to keep others out.

Yes, Apple's sending some of your money as payment for songs you've already bought, but does that matter when you're getting a service worth at least what you're paying?

It's not like they've turned off the ability to manually sync your devices via USB.
Quote:
Originally Posted by JBFromOZ View Post

This appears on the face of it to be an amnesty, allowing the pirated libraries users might have to be one time brought into their "current valid songs" list.

I don't see that. If you've got pirated songs, and law enforcement finds out, that fee isn't going to prevent them from prosecuting you.
Quote:
Originally Posted by JBFromOZ View Post

I can foresee that after a period of time the "amnesty" may go away, and as there is a "better" managed version of your songs, the ability to play your old "pirated or cd sourced" music may be hampered.

That would effectively cancel the service. iCloud can sync content purchased from the iTunes Store without paying for Match.
Quote:
Originally Posted by JBFromOZ View Post

what better way to bring more producers into the fold than to say "Oh hi, we're apple, we happen to have a bajillion copies of your new song being uploaded to our iMatch service, so we thought we'd give you some money. We don't presently have a distribution agreement with you, care to supply your catalogue to us and get more money?"

I'm sure that's part of the equation here...
Quote:
Originally Posted by Euphonious View Post

So Apple is paying the copyright holders from Match revenue. Do you think Apple would be giving up a single cent of that income to record companies if it didn't have to?

You're right, they probably do have to. Streaming music over the internet, even if it's your own music and is restricted to your own devices, is legally considered a broadcast. So there are license fees to be paid, just like those a radio station would have to pay.
Quote:
Originally Posted by bitzandbitez View Post

if my memory serves me correct; APPLE gets NOTHING from the Match fees...

Nope.

See http://www.macrumors.com/2012/02/08/...g-is-accessed/. According to the president of TuneCore, the $25/yr is divided up based on the same formula used by everything else in the iTunes Store. Apple keeps 30%. Of the remaining 70%, 88% goes to the labels and 12% goes to songwriters. The specific amounts going to each individual label and songwriter is based on how many times a song is accessed via the Match service - whether matched or uploaded.
post #34 of 37
.

Posted by Orlando
If you buy a CD, should the music labels get a fee each time you press play on the CD player?

Posted by Hill60
If it is in a public place, as part of a business, then they already do.

.


Well, yes/sorta, but sure comes with an 'interesting catch'

Or least it did just a few years ago, in my experience
Has maybe changed some now, in a way - but not in its essence

.

A Bar with Music by a DJ or Band (jukeboxes are separate animal unto themselves), had to pay a 'monthly fee' to ASCAP (or somebody, forget exactly at this moment)

But, there was no 'menu fee listing' of those charges, no ala cart, take it or leave it

Just whatever the 'Local Rep' says (and basically according to how big a 'busine$$')

If you don't like the amount, don't want to pay that much each month ?

Tough Titty - don't play any Music

.

Humm, isn't that how 'Vito' ran his 'protection service' back in the day ?

Do your History Research - will find many of the same 'forces/interests' from 'back in the day' are still involved in Music, Film, TV, Radio, Phone, Cable, ASCAP, BMI, RIAA, MPAA, etc etc

They merely went 'legit' (to the General Public) as we moved into this 'Modern Age'

But as much as they can 'get away with it' - are still playing the same 'games'

And now if you don't want to 'play/pay' ?

Well, least 'Vito' won't come around anymore to 'rearrange your elbow'

They just send Lawyers

.



.
post #35 of 37
Quote:
Originally Posted by BC Kelly View Post

.A Bar with Music by a DJ or Band (jukeboxes are separate animal unto themselves), had to pay a 'monthly fee' to ASCAP (or somebody, forget exactly at this moment)

But, there was no 'menu fee listing' of those charges, no ala cart, take it or leave it

Just whatever the 'Local Rep' says (and basically according to how big a 'busine$$')

If you don't like the amount, don't want to pay that much each month ?

Tough Titty - don't play any Music

That's not how it works.

The copyright holder (which is usually the record label, but might also be the artist, depending on the contracts involved with the music production) always has the right to decide who, when and where all public performances are permitted. If the copyright holder doesn't give you permission to play a song in your venue, then it is illegal, period.

Of course, it is impossible for a private person to get explicit permission for each and every song that he might want to play. And most of the time, the copyright holders are willing to grant permission in exchange for a fee.

In order to make the process manageable, there are copyright clearinghouse agencies (three in the US: ASCAP, BMI and SESAC.) In exchange for a fee, they issue public performance licenses for every song in their catalog. Since all the major labels, and most smaller labels and private artists belong to one of the three, if you buy a license from each one, you effectively have permission to play any song you want.

Of course, the fee for the license will depend on how much music you play (based on how many hours you are open and playing music) the source (live band, DJ, a jukebox, a CD player or something else), how many people will be listening (the size of your venue) and whether you charge a cover for people to come and listen. This is no different from the fact that radio stations with larger audiences have to pay more for the songs they play.

You don't have to pay for these licenses if you don't want to, but if you don't then you're on your own to get permission from the copyright holders. If you are just playing your own original music, or music from local bands, where they gave you permission, that's fine. If you want to play a song where a major record label holds the copyright, then good luck getting that permission without going through a clearinghouse.

There's nothing shady going on here. Without a license, you have no right to put on a public performance of somebody else's copyrighted work. All the organizations you are complaining about are there to make life easier for you, so you don't have to get thousands of individual contracts in order to play a broad selection of music.
post #36 of 37
Quote:
Originally Posted by shamino View Post


Of course, the fee for the license will depend ... etc etc

.

Can you show us a published list of those fees ?

Are the details you describe standardized and openly available ?

Thanks, BC

.
post #37 of 37
Quote:
Originally Posted by shamino View Post

The specific amounts going to each individual label and songwriter is based on how many times a song is accessed via the Match service - whether matched or uploaded.

That would be wrong in most cases. Most of the songs that can't be matched and are therefore uploaded are not matched because they are not identifiable. Nothing goes to anyone if you don't know who to pay it to.
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