Who reigns in the Cloud - and is it a storm in a teacup for labels? · Mar 30, 09:09 AM

Talking cloud, ain’t saying nothing?

Amazon stole some thunder from their rivals’ clouds this week with their announcement of a new ‘Cloud Drive’ service: rumours of similar plans from Google and Apple had been circulating for a while, but few expected Amazon to jump ahead of them so suddenly. The internet is alight with analysis, conjecture and anticipation – but should these changes worry labels or encourage them?

As the streaming market takes off (with Spotify and We7 leading the way), the next obvious shift is towards “cloud” based services. These allow users to store their music library online and access it from any computer or mobile device. For example, Amazon’s new Cloud Drive provides five gigabytes of storage space by default, along with a browser-based media player (only available in the US at time of going to press) which can be used to listen to any music files held in the locker. Purchasing an mp3 album from Amazon increases the available space to twenty gigabytes, and up to a terabyte of extra space can be rented on a yearly basis.

This is broadly similar to what Apple and Google had been expected to announce, but in a way it’s actually bolder. The ‘Big Two’ had both taken pains to emphasise that they were considering the legal side: Apple’s expanded MobileMe service was only expected to play tracks which had been purchased from iTunes, and Google’s cloud storage locker would tie in with their forthcoming music streaming service and only allow customers to store music for which Google already had a license. Amazon have sidestepped the legal aspect by claiming that their service’s functionality is comparable to that of an external drive – nobody needs a public performance license to save or play back their data on one of those, so why should storage in the cloud be any different?

The legal objection to this might be to argue that since the service is operated by a commercial concern in order to make a profit, streaming from an Amazon locker should be seen as a public performance… but this would probably be stretching the point beyond the sympathies of most music customers. Commentators are hurrying to analyse Amazon’s move: is it designed to support a forthcoming Amazon tablet PC? Is it simply a spoiler move against Google and Apple (…or indeed Ubuntu, who offered one of the first viable cloud music solutions over two years ago with their Ubuntu One tie-in with download store 7Digital)? It’s likely that these questions will be cleared up by the passage of time, but for labels they should be fairly irrelevant… the question that interests us is: will these services help or hinder music sales?

Given that these locker services are being established by music retail giants (with Apple, Amazon and soon Google all selling mp3s), it’s probably safe to say that their main purpose is to drive sales. In theory cloud lockers could be used for illegally sharing songs, but since access to them is tied to their users’ store accounts, this seems like a low risk: giving others access to an online account linked to one or more credit cards will almost certainly be too much of a trust issue for this to result in widespread file-sharing. The worst thing that labels have to fear from the adoption of such lockers seems to be the possibility of a few sales lost to people who don’t have their music library with them, but who are so determined to listen to a particular track at a specific time that they buy another copy. This is a pretty exceptional scenario; if repurchases of this kind are all that’s currently keeping the music industry afloat then things must be worse than anyone had previously feared. It’s just as valid to look at the other side of the coin – there may well be a high number of people who would buy more music if they could do it during their lunch break at work without having to consider transferring the files to their own computer.

It seems more likely that the complementary adoption of both streaming services and cloud storage will encourage sales of music. Google may have the most influence here when their music service comes online: it’s heartening to imagine entering the title of a new album into a search engine and seeing the first page of results dominated by licensed streaming services with legitimate mp3 purchasing links, instead of the countless file-sharing site links which come up at present. The ‘empty shopping basket’ effect may also come into play when customers have online storage for their music (“I still have fifteen gigabytes of free space which I need to fill up – I’d better buy the expanded edition with the B-sides and remixes!”).

Amazon’s unexpected plunge into the music locker ‘arms race’ was undeniably gutsy and it will be fascinating to see how Apple and Google react, as well as what the legal ramifications may be. However, regardless of which side wins over the crowd in the cloud, it seems likely that the music industry as a whole will prosper rather than suffer from this trend – there is always a silver lining!

Update:

Google have now unveiled their music service (currently in beta and available in the US by invitation only), and it’s essentially very similar indeed to what Amazon offer: a streaming ‘locker’ service for storing and playing back tracks from a user’s existing music collection. In many ways the Google service is more powerful than Amazon’s: storage is limited to “up to 20,000 songs” rather than Amazon’s default 20 gigabytes, and the playback features (such as an automatic playlist generator) are generally somewhat slicker. However, it obviously lacks Amazon’s integrated music store.

The service is primarily being touted as a tool for Android device users who want access to their music out and about, and it seems very well-suited to fulfilling this role. It’s currently advertised as “free for a limited time”, so Google appear to be holding onto the option of charging users.

It remains to be seen whether this is a prelude to the introduction of a more full-featured online music service, or merely a sop to competitors like Amazon. Licensing issues with the major music publishers seem likely to rule out the former for a while longer unless there’s a sea-change in opinion at the ‘top rung’ of the industry, but Google probably won’t be content to stay still for long: whatever’s next, we’ll be keeping an eye on developments.

— Stephen Hedley

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