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iTunes Match generates 'magic money' for music copyright holders

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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.