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iCloud Cuckoo Land June 7, 2011

Posted by Bill Rosenblatt in Music, Services, United States.
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As part of Apple’s iCloud announcement this week, Steve Jobs announced a “cloud sync” feature similar to those launched by Amazon and Google in recent weeks.  This service had been heavily rumored and even partially pre-announced for weeks.  The announcement answers most questions about how iCloud differs from the Amazon and Google offerings, and what Apple is able to offer now that it has licenses from the major recording companies while the others don’t… yet one tantalizing point remains unexplained.

iCloud automatically stores users’ iTunes music tracks online.  It automatically downloads newly purchased tracks  to all of a user’s connected iTunes devices, which include iOS devices (iPhones, iPod Touches, iPads) and Windows PCs (Vista or higher; XP isn’t supported) and Macs with iTunes software.  Users can choose which of their previously-purchased iTunes tracks are copied to all of their devices. It’s all free to iTunes users, but you have to use an Apple device or Apple iTunes software to use this feature of iCloud.

Apple doesn’t make any mention of streaming content from iCloud to Internet-connected devices, whether Apple or otherwise.  It all seems to be file copies and downloads.

This leads one to wonder: just why did Apple pay $80 Million for the streaming infrastructure of Lala.com in December 2009?

Apple is ambiguous (at best) on this point.

The iTunes Match feature adds to the mystery.  iTunes Match, which will launch this fall, lets users store their non-iTunes tracks in iCloud, regardless of their origin and as long as they are in a standard DRM-free format.

iTunes Match incorporates a feature that has come to be known as “scan and match”: it identifies music on the user’s device, using techniques such as examining ID3 metadata tags in MP3 files and acoustic fingerprinting.  If it finds a match and the track exists in the iTunes catalog, then it need not be uploaded to the Cloud; Apple will simply make a copy available for that user.  If iTunes doesn’t have the track, then it’s uploaded to online storage.

Apple charges users $24.95 per year for this feature, a chunk of which will go to record labels as royalties.  Given that most “non-iTunes” tracks are likely to be of dubious origin (downloaded from file-sharing sites, ripped from friends’ CDs, etc.), this amounts to a “piracy amnesty” fee.  It’s also worth noting that Apple didn’t originate this technique.  Apart from Michael Robertson’s MP3tunes.com, which had to drop that feature under legal pressure from the record labels, CatchMedia offers this feature today in the UK, in partnership with Carphone Warehouse.  It has record company licenses and charges consumers a fee that amounts to double Apple’s price.

The scan-and-match technique has two advantages over the Google and Amazon schemes, which require every track to be uploaded.  First, uploading takes time.  Depending on the number of tracks in a user’s collection and the Internet connection speed, uploading could take hours, days, or even weeks.  Scan-and-match takes seconds per track as long as it finds a match.  The other advantage is that for matched tracks, the user gets iTunes’s high-quality (256kbps AAC) version of the track regardless of the quality of the track on the user’s device.

The question is, how does the user get this track?  Is it downloaded to the user’s device(s) or streamed?  If it’s downloaded, does the user’s original file stay or disappear?  Again, Apple does not say.  The web page uses language that sounds intentionally ambiguous: “the music iTunes matches plays back at 256-Kbps … quality.”  The press release says “replaces your music,” which is a bit more suggestive of downloads; yet it also says “it makes the matched music available in minutes (instead of weeks to upload your entire music library)”, which implies that “replacing” does not involve downloads that could be as time-consuming as uploads.  Furthermore, Apple’s acquisition of Lala tips the balance back towards streaming.

Even knowledgeable commentators have mixed views; some (like CNet and the New York Times) say download, while others (like the Associated Press via Eric Garland of online media measurement firm BigChampagne) say stream.  Others such as Music Ally and Digital Music News are hedging their bets.

The difference is certainly important.  So why isn’t Apple forthright about this aspect of iTunes Match?  Leaving aside Apple’s penchant for secrecy before launch — which Apple otherwise didn’t exercise this time — there are a few possible explanations.  The options, as I see it, are these:

  1. Apple intends to let users stream their tracks to any Internet-connected device, not just iOS or iTunes devices, using a web interface.  Google and Amazon offer this.
  2. Apple intends to let users stream their tracks, but only to iOS devices or PCs/Macs running iTunes, using some type of proprietary secure streaming protocol that excludes non-Apple devices.
  3. Apple will download copies of iTunes Match tracks to users’ iTunes devices.

The first of these strikes me as unlikely, given that everything else about iCloud and iTunes Match seems designed to recapture the platform lock-in that Apple enjoyed when it used DRM.  Now it’s lock-in through the convenience of seamless, automated cloud sync.  Yes, you can copy your tracks to non-Apple devices, because they are DRM-free, but it’s a hassle compared to the automated ease of iCloud.

Furthermore, because Amazon and Google offer streaming, wouldn’t Apple want to publicize it heavily instead of using ambiguous language?  Apple is not shy in using a competitive matrix to claim its superiority over the others.

The second is a distinct possibility.  It would also explain Apple’s ambiguous language: it’s the type of “feature” that critics would pounce on, given that it’s clearly less open than Amazon and Google, and includes what could be called DRM.  If this is what Apple intends to offer, it’s not surprising that Apple would be reticent or evasive about it now.

The last option is also a possibility.  It is consistent with platform lock-in; moreover, it increases the possibility that users will use iTunes and iOS devices as their only music players.  It could be a feature of the financial deal that Apple struck with the record companies.

But there are two problems with this option.  First, it would cost Apple much more money, as royalties on downloaded copies would be much higher than on streams.  Second, this option “elevates” non-iTunes tracks to the same status as tracks purchased from iTunes.  It sends a message that users need not purchase tracks from iTunes, yet those tracks can become full-fledged iTunes tracks anyway.  That’s the status quo for tracks stored locally, but it’s inconsistent with Apple’s opportunity to re-establish lock-in through the Cloud.

What do you think?  Here’s a poll:

In any case, what Apple is definitely not offering with iCloud is the ability to stream any of the music from its vast library on demand, as is the case with services like Spotify, Rhapsody, Napster, Rdio, and MOG.  Instead, Apple is sticking with the paid-download model.  It boggles my mind why journalists and analysts aren’t focusing on this distinction, which to me seems far more important than “cloud sync.”

I have said that cloud sync is now a “checklist item” for online music services.  I’ll go further and state that it may turn out not to be a particularly valuable feature.  For those who use streaming subscription services, it’s irrelevant.  And for those who hoard thousands of MP3s on their hard drives — a crowd that overlaps considerably with the crowd that actually uses more than one or two music devices actively — cloud sync could become a nuisance once their 8GB or 16GB portable devices fill up with tracks that the almighty Cloud puts there automatically (for that scenario, Apple needs to invent iCache).

Furthermore, if you have multiple music devices, the odds are that you listen to different types of music on each device anyway.  My PC is used mostly for background music in the office; my Android handset is for active listening while commuting; my iPad is for home with the kids.  I have a moderate-size digital music collection (a few thousand tracks) and use Rhapsody and Pandora as well as file-based music players.  Occasionally I want to copy music files from my PC to another device; a cable or Bluetooth works just fine.  Cloud sync doesn’t help me.

Comments»

1. James Gardiner - June 7, 2011

iCloud sounds a little lame duck to me..

I hope we find out the details soon. Right now, Google or Amazon sounds like a far better service, even if you have to upload the files, no biggy. Its the freedom that makes the service useful. Apple!=Freedom in the past so I don;t imagine iCloud will be what we want it to be..

2. Thad McIlroy, The Future of Publishing - June 8, 2011
3. Bill Rosenblatt - June 8, 2011

This is speculation upon speculation. No one knows the real facts. For example, if they are going to be doing downloading and “replacing” users’ old (and possibly illegally obtained) files, then the replacement could be offered on an opt-in (or opt-out) basis.

No one will know for sure until Apple actually launches the sucker (and sees if she floats).

4. Joe Clark - June 9, 2011

It would take ages to correct the myriad mistakes in your post (and you’ve already been through a full round of corrections, I see). iCloud won’t “store” your music “online”; it will be stored somewhere remote, but will not be a virtual hard disc like Dropbox and won’t stream. Every single reference to streaming in your post has no basis; the service is about uploading and downloading so that all devices have the same libraries.

And again with the word “store”: iTunes match will not “store” your music like Dropbox. It will create a clone of the music files you have that match its 18-million-song inventory, then push that to other devices.

Don’t project U.S. copyright law onto other countries. You mentioned the U.K., but that country and Canada, among others, have private-copying levies that essentially authorize home duplication of music. Any songs acquired that way are not “dubious” as to “origin.” The point is irrelevant: Infringing and non-infringing files are all covered.

There is no “platform lock-in”; music files are AAC with no DRM. You can play them on the Zune you insist you love so much. (I’m just guessing.)

What, exactly, is the relevance of your dismissive “cuckoo land” catchphrase?

5. Bill Rosenblatt - June 9, 2011

Joe,

I can see that you have not lost your infinite tact and charm over the ages.

Frankly, I don’t know where to start either, because you are the one who is wrong about this. Wrong in every respect.

Let me start with the easiest one: “Cloud Cuckoo Land” is a reference to Aristophanes’ satire The Birds. It is the name of an idyllic place where everything is perfect. I thought the reference fit nicely, thank you very much.

“iCloud won’t’store’ your music ‘online'; it will be stored somewhere remote, but will not be a virtual hard disc like Dropbox and won’t stream.” Let’s continue with the myriad errors in that one sentence:

  • “Remote” equals “online.” What else would it be?
  • “Virtual hard disc.” I never said it would be a virtual hard disk. If it is download, it could continue to be the single copy of each file that Apple stores on its servers now.
  • “Won’t stream.” How do you know? As I said, journalists and experts with access to Apple sources that are as good as anyone’s disagree on this point, and Apple’s wording is ambiguous. I would even guess that Apple and the labels are still arguing over this point, for reasons I will get to later.

Now let’s go to another sentence that shows you have no idea what you’re talking about:

“Any songs acquired that way are not ‘dubious’ as to ‘origin.’ The point is irrelevant: Infringing and non-infringing files are all covered.”

On the contrary: there are plenty of statistics, well known to label executives, about the percentage of files on a typical iPod or iPhone that are obtained without authorization, and it’s very high; 95% is the usual figure bandied about. How do I know this? Because I am currently working with a music startup that has a similar feature, and we are negotiating with the major labels on this exact same point. Make no mistake: the labels see iTunes Match as a way of capturing revenue from “pirated” (I don’t like that term) content.

Now to the factual errors in your point about private copying in copyright laws. First of all, the UK does not have private copying laws. Most of the rest of the EU does. US laws are derived from and therefore similar to those of the UK. Private copying laws originated in France. Canada’s laws are, unsurprisingly, sort of a hybrid of the two.

Secondly, under private copying regimes, users are legally allowed to make private copies of legitimately obtained content (see above), but at the same time, copyright owners are entitled to compensation for those copies. Hence the levies in those EU countries… and Canada. How Apple’s $25/year gibes with levies collected in some (not all) EU countries on iPod-type devices is an open question. As far as I know, iTunes Match will at least start in the US only. In Europe, people will complain about record companies “double dipping,” which will not be the first time complaints have been raised about this, but we have to wait to see what happens.

Platform lock-in: to educate yourself on this matter, I suggest you read Shapiro and Varian’s classic Information Rules. Then you will learn that DRM is not synonymous with platform lock-in; there are many other ways to do it. If you seriously studied Apple products and services, you would notice that Apple has been developing ways to lock in consumers that are more subtle than DRM. Read some of my older posts, e.g. this one, to learn about this. Apple clearly sees an opportunity for more of this subtle platform lock-in via the cloud. It’s to their credit that they have found ways to do this that for the most part add value for consumers instead of restricting usage.

Finally, it appears that you didn’t even really read my article. If you did, you would know that I don’t have a Zune. I listed the devices I have toward the end of the article. If you take a look, you will see that one of the three is an Apple iPad (to be precise: iPad 2, WiFi only, 32GB, white. Bought on iPad 2 launch day. Very nice device.)

This blog is supposed to promote a high-level constructive dialog about copyright and technology issues. In that light, I’m banning you from future comments.

Have a nice day.

6. Xtof H. - June 23, 2011

Yup,

Pretty constructive post, and engaging debate :)
As mentioned the only way we will see what actually the product will be, is to wait for the release date.

I’m especially interested in the recognition method, Since my library is a complete mess, audio fingerprinting rather than ID3 tag survey is a must.

Wait and See.
Very constructive post (I love the previous comment response :D )


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