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Summary:

Apple’s hard work winning over record labels may well be rewarded. A new report says that Apple’s upcoming cloud music service will offer the ability to scan your hard drive, and then mirror your music collection on its own servers with better versions of some tracks.

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Apple’s hard work at winning over record labels may well be rewarded, according to Bloomberg BusinessWeek. The publication says Apple’s upcoming cloud music service will offer the ability to scan your hard drive, and then mirror your music collection on its own servers, according to three people “briefed on the talks” between Apple and the labels. Not only that, but if some of your tracks are of poor quality, Apple’s service would automatically replace it with a better version, the sources said.

If accurate, these reports describe a service that would have a weighty advantage over the recently released competitors from Amazon and Google. Both of those require users to upload their collections before making music available in the cloud, although Amazon makes new music purchased through its MP3 store available automatically on the web. Apple’s method would save those with existing music libraries huge amounts of time.

But time isn’t the advantage to Apple’s service. According to BusinessWeek, the scanning process wouldn’t differentiate between music acquired from legitimate and illegitimate sources — meaning even tracks downloaded illegally would be mirrored in the cloud, and even upgraded depending on the track’s quality.

Why would the music industry agree to a service that basically rewards pirates? Because Apple’s service won’t be free, says BusinessWeek. It will likely incur a monthly cost, since the licensing fees Apple would have to pay for the arrangement described above would be enormous. But if labels are getting a chunk of revenue partially derived from pirated music, they’re actually reclaiming some of the original loss on that theft.

But will users pay for cloud access to their entire music collection from PCs, iPhones, iPads and other Apple devices? We asked that exact question of users back in April, when we weren’t sure of what the cloud service would provide. While a majority answered “no,” it wasn’t a landslide; 43.26 percent reported that they would be willing to pay. Amazon’s service carries a fee structure dependent on how much storage space you use (5 GB of storage is free), and while Google’s offering is free, it’s still a beta product and has a hard 20,000 track cap. Even with a subscription model, if Apple’s offering is unlimited and also offers full library mirroring and upgrading, it will be very strong competition.

Labels are reportedly banking on the fact that this deal will cause Amazon and Google to get on board with similar licensing deals, but Apple will benefit from being first out the door, and it could gain significant early lock-in advantage if it offers longer-term subscriptions, like the yearly one it uses for MobileMe.

  1. I really doubt Apple would do a monthly fee, unless they are deliberately trying to keep the number of users low to keep things within a manageable level for the infrastructure they currently have.

    Now, I would see a one time per song fee for songs either not purchased through iTunes and/or to upgrade to a higher quality (the way they do the iTunes Plus thing to upgrade previously purchased 128k songs).

    “Death by a thousands cuts” strikes me as more Apple’s style based on what they normally do. Mobile Me is the one exception, and I don’t think Apple counts that as a huge success. Or maybe the service is free for Mobile Me subscribers, to add value to that service.

    With my iPod/iPhone, I already have my music library with me where ever I go. that was how they sold those. I just don’t see what additional benefit the service, as it has been described by speculation so far, provides that they should/could charge.

    I don’t mean to say they won’t. Only that no one seems to have thought it through enough to come up with what Apple will unveil, IMHO.

    Joe

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    1. “I really doubt Apple would do a monthly fee, unless they are deliberately trying to keep the number of users low”

      It’s called a subscription, it’s been bandied about and the labels reject the notion. How many times has it been posited – the ISP can add a $12.95 a month fee and people can consume as much of “x” as they want? Labels hate the idea because the only way revenue grows is because of population growth, not more sales. Can Apple pull it off? Make it a compelling and seamless experience? Can Apple seduce labels to make a l–o–o–n–g term commitment, at least a decade? To have labels publish all the music in their back catalogs? That the thing becomes a powerful and stable historic database of tunes? We’ll find out. If a person spends less than $150 a year on music then this isn’t the best deal, if they normally spend more, this will be a bargain.

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      1. Right. And if news reports are correct, the labels have been pushing subscriptions since way back when and it has been Apple who has balked at the notion.

        From what I can tell, all the reasons Apple didn’t go the subscription music route hasn’t changed. Which is why I don’t think Apple is planning on a subscription service at all, except, as I said, to add value to a subscription service that isn’t doing all that great to begin with, aka MobileMe.

        A monthly fee may be in the cards, but not for this “mirror your iTunes library” feature alone. As a feature in a long list of features, maybe.

        But I could be wrong.

        Joe

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  2. Prof. Peabody Friday, May 27, 2011

    The problem I see with this is the same problem that leads users to get their tracks from other sources besides iTunes (legally or otherwise). iTunes doesn’t have the content half the time.

    Everything I have is legal, but more than half of it didn’t come from iTunes because the music or video was “not available in my country.” iTunes is great if you are an American and only want to listen to or watch American stuff, but otherwise not.

    This is a huge problem, and it’s source is the recording and entertainment industry’s outdated contract system which isn’t going to change anytime soon.

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    1. Jason Harris Friday, May 27, 2011

      Problems like this are why the automatic mirroring will always be a “that’s nice” feature instead of the killer app some are claiming it to be. The type of person who only has a few hundred pop songs they got off of iTunes can easily store them on a device with only a few GB, so why would they need cloud storage? The type of person with an extensive music collection tends to have a broad spectrum of tastes…what if I have a specific version of the song that’s different than iTunes? How does it determine “low quality”? Is my live version going to be replaced by the studio version? What if I want to listen to AC/DC?

      In the end, there will be no cloud storage system that will completely do away with uploading your own songs. Lightening the load a bit is nice, but I don’t see it making that much difference, especially if they’re charging a monthly fee for the iCloud or whatever they want to call it. We’ll see. Maybe there’s something up their sleeve.

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      1. Ding ding ding. For all of those reasons, I am skeptical that that this will mirror anything other than music purchased via iTunes.

        The ID3 tags and settings on a song purchased via itunes will be easy to match and serve back the same copy from their server. Music I downloaded from Napster 10 years ago? I don’t think so. Not to mention, all the potential music in your library that is just not available at all through Apple. It would be a technical and logistical nightmare.

        I also would prefer my Exact Audio Copy ripped to 265kb/s VBR mp3s over Apple’s lower quality versions, so it doesn’t really take the place of a cloud back-up service either.

        Mirroring only music purchased via iTunes is relatively straight forward compared to the alternatives, and at the very least offers a little more incentive to get music from iTunes instead of other means. I think it will be free offering and only do as such.

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    2. “iTunes doesn’t have the content half the time.”

      Maybe it will…eventually. This is an excellent juncture for the labels (and some of their artists) to listen to the fans. What music is wanted? What eras are popular? Styles and artists? Does blues still have an audience? What about classical, particularly historic live performances? It’s one thing to put out a press run of discs on spec, or clean up something in the hopes it will sell. Here you’ve got a giant data mine that is probably not totally focused on current product. If the labels and publishers are smart they should like this deal.

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  3. If Apple launches this service as you have described it’s really hard to see the value proposition for users like myself. My iTunes application on my computer contains over 2,500 songs and only about 30 were purchased from Apple. The rest are all legal copies of music I have purchased on CD’s. I own this music and there is no way I will pay Apple or the record companies another cent to access it in any form. Not having to upload the music by having it mirrored on Apple’s cloud is a minor convenience, but certainly not justifying the need to rent my own music back from them. It took two days to upload all my music to Google’s Music Beta service (which works great) and that’s where it’s staying until / if someone comes up with a much better platform and doesn’t try to hold me hostage to paying royalties for something I already own.

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    1. I agree. This may be _A_ feature, a _convenient_ feature. But it hardly seems the “killer” feature some seem to be hyping it up to be.

      Joe

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  4. Silent “upgrades”? Excuse me? There’s no way in h*** I’d allow a file storage service to silently “upgrade” or alter anything I upload to their site.

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  5. With the introduction of better cloud services, subscription options, and other frimfram associated with digital music, the theory of “owning” your own tracks becomes ambiguous. We’re moving away from “owning” a library of music and drifting towards paying for access to files – you’re leasing that 4:22 seconds of listening pleasure for a fee.

    Eventually, all the big boys will offer the same library of tunes. The trick to winning consumer choice (making money) will all be how fast, how convenient, and how personalized the experience is for accessing that media. That’s one part of the game where, IMHO, Apple will always stay a step ahead.

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    1. That is certainly what the recording industry would like you to believe. But that has also NOT been what Apple has built their music offerings around. Every subscription service in the US has failed, by and large. Even Amazon’s set-up is not subscription based, but product purchase based.

      And Apple is vehemently _product_ oriented. So the thing to figure out is how this becomes either a product that supplements their product line-up or something that enhances the products they already sell.

      It doesn’t really add value to anything iPod, iPhone, iMac, or any hardware they offer, unless they plan on offering some _new_ hardware. It could add value to the iPad, but I still can’t bring myself to see the iPad as a music server. I don’t think Apple does either.

      To offer this as a product on its own runs blatantly against every other product model they have created, much less their own iTunes Music Store strategy. It could supplement the iTMS, but that seems the weakest option.

      That’s why the only thing I can see this “music service” becoming, is a part of MobileMe. It won’t be a music service on its own, but part of a larger package. And if iCloud as it exists already is any indication of their direction, this is _part_ of their cloud strategy, but not something offered in and of itself.

      Joe

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