As you know, Apple yesterday released iTunes 10.5 Beta 6.1 to developers. The software has brought out iTunes Match, a highly anticipated feature that lets you access your entire music library via iCloud, on any PC/Mac desktop or iOS device. Now, ever since Steve Jobs took the wraps off of the new service at Apple’s developer conference in June, people have been concerned with usability because Apple avoided any mention of the term “streaming”. A music service in the cloud that only lets you download individual songs to your devices did sound like a disappointment to many, especially compared to Amazon’s Cloud Drive and Google’s Music Beta, both streaming-enabled.

Worry not, though: If early demo videos are anything to go by, iTunes Match sports best features from both worlds. To download a file to your device, just hit the little down arrow next to a song in desktop iTunes or the Music app on iOS 5. You can also remove a local file from your device, which will make the arrow icon re-appear. Tapping a song appears to initiate a streaming session with almost no delay, as seen in a pair of clips by Insanely Great Mac.

However, All Things D’s Peter Kafka argues this isn’t necessarily streaming per se. Instead, he observes, “Apple says that what looks like a ‘stream’ is really a simultaneous listen and download — users can hear the song while their machine ingests it”. Interestingly, the publication quotes an unnamed music industry executive who says Apple did acquire streaming rights. The source hinted that “this is a philosophical/design issue on Apple’s part”. Also, an Apple spokesperson told All Things D this:

While a video making the rounds today makes it seem as if Apple’s upcoming iTunes Match service will stream music from Apple’s servers to a user’s device, that’s not the case. An Apple spokesperson confirms that any music you want to access from your cloud-based “locker” will still need to be stored on your iPad, or iPhone, or whatever device you’re using to listen to the song.

Semantics aside, the fact remains that you can listen to an iCloud song without having to download the entire file first. It’s not true streaming where the file gets deleted immediately upon playing, but is close enough. A couple more noteworthy observations on iTunes Match…

Obviously, iTunes Match is limited to a certain number of developers in its beta phase. The program appears to be already closed to new participants, as seen in the below screenshot, provided by @ikahn6294, that reads:

iTunes Match beta testing has begun with an initial set of developers. Over the next days, we will continue to expand our testing. Please check back later to subscribe.

The first beta of iTunes Match doesn’t work with iTunes LPs and Extras and certain file types. Also don’t expect top-notch reliability and know that Apple may occasionally delete your files form the cloud during the beta phase. You cannot add more than 25,000 songs to iCloud. However, the limitation applies only to the matched songs you ripped or purchased elsewhere and uploads iTunes Match couldn’t fingerprint at all – your iTunes Store purchases do not count against the allowance, Apple makes it clear: “Once subscribed, you can add up to 25,000 songs to iCloud, and iTunes purchases do not count against this limit”. What’s best, your music locker for up to 25,000 songs has nothing to do with your iCloud storage space (free accounts will include 5GB of storage).

Also, iTunes Match will not add your apps, books, movies, TV shows, ringtones and audiobooks to your iCloud library. Note you’ve been able to re-download those items on any device for quite some time and Apple recently flipped the switch on the ability to stream television shows purchased from iTunes. iTunes Match will cost $25 a year. Apple will thank developers who participate in the beta by throwing an additional three months of service with their twelve-month subscription.

MacRumors pointed out that the ability to either stream or download your iCloud files could be especially handy on iOS devices as “your music library won’t need to take up valuable space on the device itself”, provided you have a reliable Internet connection, of course.

So, is iTunes Match a Spotify killer? Most certainly not, as Spotify for iOS devices and Macs has more compelling features and a stronger emphasis on the social component. But make no mistake, Apple has big plans for iCloud. In this ense, iTunes Match being built right into the bowels of iOS 5 is certainly an important advantage. A survey of 1,500 iPhone users by RBC Capital Markets suggested that iCloud could quickly reach 150 million users, adding $1.5 billion annually in iTunes Match revenue to Apple’s bottom line.

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