TuneCore: iTunes Match royalties appearing ‘out of thin air’, $10,000 in two months

In a blog post from earlier today (via Ars Technica), the CEO of online music distribution service TuneCore announced some intriguing numbers on iTunes Match royalties it has collected for its clientage. While calling the payout “magic money,” CEO Jeff Price said his company collected $10,000 for a two-month period beginning at the launch of iTunes Match. While TuneCore’s artists have included the likes of multi-million album sellers like Nine Inch Nails in the past, Price said the royalties represent money most independent artists using the service would have otherwise never received:

“A person has a song on her computer hard drive. She clicks on the song and plays it. No one is getting paid,” Price wrote. “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.”

The real question concerns how Apple’s royalty payouts compare to other services like Spotify. Price explained to MacRumors that Apple is keeping 30% of iTunes Match revenues, with 88% of the remaining revenues going to record labels, and the other 12% to songwriters. Like royalties throughout most of the music industry, an artist’s cut is determined by “how many times someone accesses your song”. Price also said a royalty is paid for both songs that are uploaded, and those get matched.

Ars noted it is important to remember in the case of iTunes Match that if a user first purchases a song through iTunes and he/she is an iTunes Match customer, the artist is essentially being paid twice off the same song (once from the first purchase, and again from the iTunes Match royalty). Likewise, if the user uploaded music legally purchased on CD, rather than purchasing it from iTunes, the artist would still be paid twice. For those thinking $10,000 is not a lot of money, Price argued, “Before you were getting zero, now you are getting something.”:

The music industry needs innovation. Services like iMatch, Spotify, Simfy, Deezer and others are bringing that innovation—it will take some time to learn which are the ones consumers want. But in the interim, seeing an additional $10,000+ appear out of the thin air for TuneCore Artists by people just listening to songs they already own is amazing!