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The thing I hate most about iTunes Match is that there seems to be little-to-no official documentation on how it actually works at this point. It shouldn't need to be a debate on a message board about whether it's actually streaming or not. I want it in black-and-white, straight from Apple, saying if it's streaming or not. I don't think that's too much to ask.
 
Meanwhile there is a manual

Meanwhile there is a manual and you can read that Music Match is downloading and not streaming.
But I do not see a big difference between real streaming and that "Pseudo-Streaming".
With real Streaming you have nothing on your iPhone/iPad and you can turn this "pseudo-streaming" into a real streaming by going to " settings->general->usage" and delete it after a day/week/month.

Thank you "Menel" for that information, that was new to me.
And I agree with him that it could save your data plan.

Apple could improve the Auto Delete by adding some rules, like a Gigabyte Size which should always be available. And perhaps a rule that 5 star rated songs always stay on the iPhone/iPad.
 
This is what I think is going on

If you tap on a song in an album, it will download it, but not in the traditional sense. It downloads it and a few songs forward in the album. But it is downloading it to a streaming cache. This is so there is no lag in going from the playing of one song to another…as was the case in iOS 5.1.1. I don’t know how big the streaming cache will get before some automatic clean-up process is done by iOS 6 if even any clean up is done. Maybe you have to manually delete the songs from the cache. Maybe the cache cleans itself out as you need more space by deleting the most unused songs. Maybe it clears out after a preset amount of time. Who knows.

These songs in the streaming cache do look and act like downloaded music, because they are. For example, if you turn on Airplane Mode the songs will continue to play because they ARE on your phone in that cache. Also, if you turn off “Show all songs” you WILL see those songs that are in the Streaming Cache…just like you would if you had “really” downloaded them by tapping on the Cloud icon with the downward arrow for the album. One hint that you have not “truly” downloaded the song when you just tap on it is that the Cloud icon does NOT go away. It remains. That’s because by tapping on the song, you have streamed it AND placed it in the Streaming Cache. It has NOT been downloaded and stored in your Music storage area. At least, that is what I have been able to gather from reading and experimenting with my phone.

The big issue here, IMO, is that this Streaming Cache is taking up memory on your phone. For those of us who subscribe to iTunes Match to control how much of our phone’s memory our music takes, it remains unknown how big this cache is allowed to get before it is cleared out…again, if it is cleared out at all. I have NO idea and Apple sure has not made an attempt to explain this (or if they have, the explanation is really hidden well!).

This really feels like a big step backward for iTunes Match. It has become so complicated I might as well get my PhD in quantum electrodynamics instead.

Other streaming services do this. They just hide the streaming cache whereas Apple puts it out there in the open. That's not necessarily bad. But, Apple has done it in a way that makes it confusing because music truly downloaded from the Cloud behaves so much like the music downloaded to the streaming cache.

At least that's what I think is going on.

What ever happened to, “It just works.”
 
I'd really like to know how iTunes Match works. I was thinking about subscribing to it because of a growing iTunes library and the fact that I'd rather not spend $100 more on a phone when I can spend $25 to stream all of my music to any device I have. I've seen conflicting reports. CNet seems to think that the songs are really streamed and cached. While the official Apple iTunes Match page seems to say that the song is still downloaded to iOS devices. What the heck? Haha
 
I would say for certain they are not cached.

I have no songs on my iphone. If I "stream" 10 from iTunes Match, they remain on my phone when I turn iTunes Match off.

2) The number of songs on the setting/general/about page increases form 0 to 10.

3) The memory available on my phone reduces.
 
This page in the iPhone 5 manual says it all...
 

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As a new iPhone owner (if it ever gets here), a quick question. I read in the manual that once it gets to a certain space limitation it deletes the oldest song. Is there a setting to only allow so many GB of space for songs, so it will not wait until the phone is really full until it starts to delete?
 
These songs in the streaming cache do look and act like downloaded music, because they are. For example, if you turn on Airplane Mode the songs will continue to play because they ARE on your phone in that cache. Also, if you turn off “Show all songs” you WILL see those songs that are in the Streaming Cache…just like you would if you had “really” downloaded them by tapping on the Cloud icon with the downward arrow for the album. One hint that you have not “truly” downloaded the song when you just tap on it is that the Cloud icon does NOT go away. It remains. That’s because by tapping on the song, you have streamed it AND placed it in the Streaming Cache. It has NOT been downloaded and stored in your Music storage area. At least, that is what I have been able to gather from reading and experimenting with my phone.
If it looks like it downloaded; if it acts like it downloaded; if it smells like it downloaded, then I'd say it has downloaded. I think the word cache is being used way to much around here. Cache, download; the end result is the same, they both are stored on the phone which means neither is a true streaming option. iTunes Match is not a streaming service; never has been and never will be as far as Apple has let on.

I have no problem with that, what I do have a problem with is the removal of the ability to delete individual albums/songs with Match turned on. For those of us who don't want to leave the decision of what music gets deleted to the OS, this is a huge pain in the neck.
 
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