clouds.jpgLos Angeles – It appears that copyright holders may finally recover some lost revenue for their music, thanks to Apple’s new iCloud and iMatch.  However, the recent unveiling of the web storage and streaming service has sparked a debate that leaves many concerned about the future of digital music and video.

iMatch is a service that automatically scans a consumer’s music library for ripped songs that weren’t obtained through iTunes or were possibly downloaded illegally, and then matches them to a library of over 18 million authorized songs and then adds the authorized versions to the consumer’s iTunes library.  Apple will provide the service for an annual fee of $24.99.  Apple has not revealed what the revenue split will be, but reports suggest that record labels will receive 58% of the revenue, music publishers will receive 12% of the revenue, and Apple will retain 30%.

To some, the iMatch service appears to be Apple’s way of saying, “If you can’t beat ‘em, join ‘em” and that it is only legitimizing music piracy.  Critics believe that it is providing amnesty to music pirates and only will reinforce the behavior.  Apple CEO Steve Jobs defended the service by stating, “iCloud is a good step towards post-piracy realism in copyright-based industries; a step towards a music industry that’s based in rational mutually-beneficial economic transactions rather than in animosity, blame, and fear.”

Somewhat surprisingly, the music industry is largely in favor of the service.  Every day, artists lose millions of dollars in revenue to consumers who illegally stream music onto their computers or mobile media devices.  With the new service, it is estimated that iMatch could generate $500 million annually if only 10 percent of iTunes users subscribe.  This sounds like a conservative estimate, given that there are plenty of iTunes users who would prefer to replace their illegally downloaded music with higher-quality, legitimate tracks and possibly free themselves of a guilty conscience. 

It looks like Apple may have found the happy medium between what some perceive as extremism by the RIAA and the outright theft of copyrighted materials that leads to lost revenue for artists.