Friday, April 22, 2011

Apple nears launch of cloud-based music service; unlike Amazon.com, hopes to have licenses in place

The second company to store and play music from the cloud will be Apple, according to reports. The first company to do so was Amazon.com, which surprised both Google and Apple by beating them out of the gate with its player-agnostic Cloud Drive / Cloud Player service.

The Apple service is very similar to Amazon.com's. iTunes customers will be able to store their music on a remote server, as well as access them anywhere they have Internet connectivity. Just as with Amazon.com's service, however, Apple has not managed to arrange any new licenses with the music industry over music stored in the cloud.

The difference, however, is that Apple is trying to arrange those licenses. When Amazon.com launched its service, it did so, reportedly, without attempting to negotiate the licenses beforehand. In fact, Amazon.com was almost defiant, with Amazon.com's director of music, Craig Pape, saying, "We don't need a license to store music. The functionality is the same as an external hard drive."

Despite it's defiance, in a later letter to the industry, Amazon.com said that it foresaw "potential enhancements to Cloud Drive and Cloud Player that would require licenses." Reportedly, the company spoke last week to possible industry partners about a "more sophisticated [music] locker service."

However, Reuters' sources say that Apple is in discussion with music labels. The company has not told its music partners when it plans to launch the service. It's possible that Apple could proceed sans licenses, as Amazon.com did.

MediaMemo said that sources said that Apple is halfway home. It has, they said, already managed to sign deals with at least two of the big four labels (Universal Music Group, Warner Music Group, Sony and EMI). One source said that Apple Vice President of Internet Services Eddy Cue, who also runs iTunes, will be in New York on Friday to try to finalize any remaining deals.

Meanwhile, Google's efforts in the cloud-based music arena is stalled, and has been known to have been stalled for some time. Google is allegedly stuck at the bargaining table with music labels, and one source said that Google has changed its proposals numerous times, from an iTunes-like service with a digital locker service to a subscription service with a recurring fee.

It's unclear why Google is vacillating, but it's theorized that the recent change at the top, with Eric Schmidt out and Sergey Brin in at CEO, has something to do with it.



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