iTunes Match, Apple’s cloud music locker, launched late last year with every major record label signed on. iTunes Match costs $25 a year per customer, and allows users to keep every one of their iDevices synced up with music they’ve purchased.

Today, TuneCore’s Jeff Price published a post praising Apple for their payouts to record labels for songs played on iTunes Match. Price detailed the $10,000 he was awarded by Apple, in only two months…

Apple charges consumers a fee of $25 a year to subscribe to the iMatch service. Once a consumer pays the fee for the service, iTunes will scour the consumer’s computers or iPhone or iPads, and make all of the songs already on these devices available for the subscriber to re-download or stream on demand. If the song is in the iTunes music store, then the subscriber does not need to upload the song.

Each and every time the consumer either re-downloads or streams a song he or she already has, copyright holders get paid.

According to Price, record labels are being payed by Apple each time a customer re-downloads or streams a song they own. Some might complain that this isn’t much money, but as Price points out, record labels weren’t getting any money before for songs only being played.

Apple also pays record labels similar to how they pay App Store developers. As MacRumors notes, Apple keeps 30% of the $25 a year, and splits up the other 70% — giving 88% to record labels and 12% going to songwriters. While companies like Spotify and Rdio pay record labels to list their music, Apple is actually paying record labels per each song played.

Price says he was thrilled to see $10,000 appear “out of thin-air”. iTunes Match is certainly a great way to combat pirating, and more smaller record labels need to understand that.

Do you use iTunes Match?