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Summary:

Google announced its new cloud music service Wednesday, and Amazon revealed its own Cloud Player in late March. At this point, Apple is really the last major player to make its move. But judging by the offerings so far, that might work to Apple’s advantage.

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Google announced its new cloud music service Tuesday, and Amazon revealed its own Cloud Player in late March. At this point, Apple is really the last major player to make its move. But judging by the offerings so far, that might work to Apple’s advantage.

Both Google and Amazon have decided that seeking special licensing for cloud music playback isn’t necessary, and that they’re allowed to offer their services without seeking any additional consent or agreements from major record labels. Google has announced that it will take down any music found to be in violation of copyright agreements, in much the same way it does with YouTube content. Amazon, likewise, has taken a similar stance, arguing that they “do not need a license to make Cloud Player available” since saving files to Cloud Drive “is the same as if a customer were to save their music to an external hard drive or even iTunes.”

There’s definitely a sound logic to that argument, but even so, Amazon seems to be rushing to smooth things over with its music content partners, according to the Wall Street Journal . Which makes sense, because Amazon also wants to control the sales channel for music, as well as the means of its storage and playback.

While Amazon and Google may be trying to make nice with major labels behind the scenes, the “shoot first, ask questions later” approach hasn’t won them any allies. And, in fact, it could send those content providers rushing into Apple’s arms.

Apple is said to be still in talks with the four major record labels ahead of the launch of its own cloud music service, and in this case, patience may prove to be a virtue. No doubt the labels are reluctant to give up any additional revenue they might be able to garner through cloud-based offerings, but Apple is now in a unique position with regard to negotiating proper licenses, since Google and Amazon have both taken a firm, public stance on the other side of the fence. Simply put, Apple is now the only game in town.

Even if Apple can’t reach a favorable agreement with record labels, it can still easily go the route of Amazon and Google before it and declare cloud music services are well within its existing rights. But while that’s an option, it’s one that Apple shouldn’t have to exercise. Instead, it can use its leverage as the music industry’s biggest current distribution channel, and the reluctance of Amazon and Google to play nice to force an agreement that would see it be able to offer a label-friendly solution which would ultimately probably benefit consumers. That could take the shape of fewer restrictions on how and when music can be access and transferred between devices, and make it possible to purchase a wider variety of music that’s immediately available directly from the cloud.

Apple’s service will look and work better than that of its competitors, at a minimum. And if it can also launch soon (like at WWDC next month) and with the full backing of the four major record labels, it’ll best its rivals in all categories, and continue to dominate mobile music.

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  1. “Apple’s service will look and work better than that of its competitors, at a minimum.”

    Right, because Apple won’t roll it out until it is _ready_. Everyone else seems to be rushing something, anything out, just to theoretically beat Apple to the punch. Odd, since Apple has yet to announce anything. It makes one wonder, what exactly do they think they think they are competing against?

    Joe

    1. Really? When has Apple ever built a webservice that looks and works good?

  2. Winning the “cloud music game” matters little. The cloud as backup and long-term storage makes a lot of sense. Every time people get a new device, they would rather not worry about moving every bit of music and documents from the old to the new. Having it stored elsewhere gives that security. But streaming music to users with mobile devices is the sort of folly that Silicon Valley execs and tech pundits chronically make. There’s at least two major reasons it makes no sense.

    First, storage is cheap. Why stream something from far-away servers, with all the accompanying hiccups, when gigabytes of it fits easily and cheaply on a device? Streaming music to mobile devices makes as much sense as putting an extension cord on a flashlight. It defeats the entire purpose of a mobile device.

    Second, bandwidth is costly and scarce in metro areas. Spectrum shouldn’t be wasted on anything that can be stored locally. As George Gilder has written, the key to tracking where new technology will actually go lies in discerning what’s cheap and what’s costly. Cloud music fails that rule. It wastes what is expensive and ignores what is cheap.

    Some of the problem lies in the artificial world in which the Valley’s execs grew up. They turn on their TVs or radios and hear no interference. They conclude that all in the radio spectrum is orderly and good just like that. Why not drop wired solutions like Ethernet for WiFi? Why not stream music over cellular?

    But the spectrum uses they’ve experienced aren’t applicable to cellular data. The FCC carefully regulates who has a TV station and keeps stations on the same channel far apart (175 miles I believe). That’s why there’s no interference.

    Cellular isn’t like that. Any of millions of people (in some cities) can get ‘on the air’ demanding bandwidth. The result is a mess that’s only going to grow worse if we try to jam everything we do into those scarce cellular frequencies. And attempts to grab still more spectrum will eventually come up short. There’s only so much bandwidth between where efficient transmit antennas grow too large (at the low end) and where an inability to penetrate buildings well grows too great (at the high end).

    I had a quite different experience than these 70s and 80s geeks. I grew up in the 1960s, when hams still used AM radio extensively on the HF bands. I can remember Saturday afternoons when the 40 meter phone band was one long series of heterodynes from all the competing stations. It was a mess.

    Cellular data usage is a lot more like those Saturday afternoon free-for-alls than it is the prim and proper world of television broadcasting. Limiting broadcasters, like amateur radio did with license exams, isn’t the answer. But limiting the reasons we use that spectrum is. It’s a scarce resource that should be wasted streaming music that can be stored.

    Amazon, Apple and Google need to display more sense than this.

    1. All good points – Agree with most.

  3. Your third and fourth paragraphs are based on a Wall Street Journal article that’s six weeks old and has since been rebutted by Amazon.

    http://www.hypebot.com/hypebot/2011/04/full-text-of-amazons-cloud-music-email-to-labels.html

    Beyond that, the headline may as well read “Apple blogger thinks Apple’s online music service will be better than Amazon’s or Google’s”

    — which may well be true, but isn’t exactly insightful analysis.

    I’d love to see something great from Apple on this front. Amazon’s offering is slick and offers consumers a lot (inexpensive space, plus no space consumed by purchases from Amazon’s MP3 store. Aside from no native iOS app, could be tough for Apple to beat. Google’s, however, is getting abused today as kludgy, difficult to use, and offering nothing to differentiate it. Without Amazon’s Android app in the picture, it might be a decent option for Android phone users. Hopefully Apple can offer something different and compelling.

  4. Waiting for all the deals to be inked as Apple is doing could also hurt them. As soon as Apple finished the hard work making the deals, Amazon and Google will ask for the same terms and do the same thing Apple negotiated for itself. Everyone using Google and Amazon will simply upgrade and stay with them instead of going to Apple.

  5. One thing is becoming clear, Apple’s competitors always rush to market with unfinished products with the “promise” that it will be better latter. Android, is a perfect example. Google always seems to take this road.

    Only reason Android worked on phones is because you can hide the price of the hardware (phone) behind the contract and they gave the Android the software to Apple’s competitors, who are now finding they can’t make a profit. Software developers are also experiencing the same problem.

    Something tells me Apple didn’t just spend billions to operate a FREE iPod in the sky, there’s more to this and when Apple lets it loose, it will throw their competitors off track again.

  6. Wilson Davalos Wednesday, May 11, 2011

    I honestly don’t see Apple making any significate move into cloud music streaming for sometime. You have to remember that they have contracts with the major labels for catalogues. As someone who has negotiated major contracts in the web space in my prior career, the way that Apple would have any leeway would be via acquisition. Very similar to how tech companies buy each other off, just for the patents.

    The problem here is that these agreements have terms that last for years. Google being the new kid on the block doesn’t have these limitations. Now for those of you citing of Apple purchasing Lala awhile back, you probably had the same conclusion that I had. Apple was going to roll out it’s cloud music service… what happened here? Also Lala may have had a foot in the door, but Apple doesn’t fit into a size 10.

  7. David Collado Thursday, May 12, 2011

    I find it hilarious and quite clueless to propose that the winner in any future-oriented race is the one who might “play nice” with the major labels which make themselves less and less relevant with each passing day.

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