Did the music industry win?

All those years ago when we set up our CD ripping service we were "approached" by the music industry. They were not happy with what we were doing, polite, but unhappy.

They had a simple view. They wanted people who owned CDs and iPod to buy digital copies to play on their portable players. At that time iTunes Music Store was offering most CDs at around £8 each, a hefty bill for a typical podServe client compared to the £1 per CD we charge. To be fair to the industry if you look at the tiny print of the copyright laws they were within their rights. It wasn't just us, they wanted everyone with an iPod (Sony music player, Zune or anything else) to take the same route.

I was very against this. I'm one of those who bought most of his music on vinyl, then paid again for some of it on cassette tape to play in the car, and then once more when CDs came out. Eventually the industry saw the light and let it be known that they weren't upset by private users and people like us ripping their own CDs. Which is what we've been doing, happily, for the last seven or eight years.

Yesterday Apple announced (for US users at present) the next phase of their iTunes program. I was struck by their option for users who have already ripped their CDs. Apple will, for a sum of $25 a year, scan your existing library and match as many tracks as it can find from iTunes Music Library. That track will then be made available to you from any PC, iPhone, iPad or iPod Touch. Finally any tracks that it can't find will be uploaded to the cloud. A simple, effective, elegant solution that Apple users will love.

What about that $25? Say $5 goes in tax - that leaves $20 to be split between Apple and the industry. So the industry would probably have negotiated a deal of $10-12. Out of the $8 album in the USA I'd guess the industry would have got $1.2. Is the new deal worth the 10 album premium they had hoped for before?

If I were a music industry exec I'd be jumping for joy. It's money for nothing, Apple and the users do all the work. It's an instant hit, a direct injection to the bottom line. Then, you get the same payment next year, and the year after. Maybe the equivalent of 50 albums worth of royalties. And all for doing nothing.

Of course the demand will fade. Legacy users will fade away, and another reason to buy a CD is demolished. But the industry don't have to make any plastic, ship it round the world, print labels, distribute to shops or Amazon warehouses. One giant step to becoming an entirely virtual operation. Just watch the bottom line pick up.