Summary:

In the stream of announcements made today at the WWDC, Apple (NSDQ: AAPL) may have dismantled more than one business model in its wake. “Sh*…

iTunes in the Cloud

In the stream of announcements made today at the WWDC, Apple (NSDQ: AAPL) may have dismantled more than one business model in its wake. “Sh*t” was the one-word response from Marco Arment, founder of the reading app Instapaper, when the curtain came up on Reading List from Safari. He later wrote he did that partly for comedic effect, and even posted a longer response claiming he was “tentatively optimistic” about what Apple’s free service would mean for his business. One other area that may not have been impacted quite as much as people thought it would be? Music.

Specifically, today we heard that the iCloud music service, iTunes in the Cloud, will let users do more with their iTunes digital music than they have been able to do before — synching and accessing it across devices, uploading all your music (not just those tracks bought from iTunes) quickly through a digital matching service, and making it all work wirelessly anywhere, rather than by docking to a central hub in the home.

But one thing that users will not be able to do — yet — is to stream that iTunes music. From Apple’s description it appears that the primary aim of iTunes in the Cloud is storage: music will be stored locally rather than delivered from a remote location. And the basic service — as it appears now — focuses on a users’ existing music library, rather than around subscriptions to services that deliver music over the airwaves, the basic paid business model behind the streaming services.

On one hand, this spells good news for the Rhapsody/Rdio/Thumbplay/Spotifies of the world: Apple will not be competing directly against them, it seems.

And how do these streaming companies view the new service? One company in Daniel Ek, founder and CEO of Spotify, told mocoNews in a written response: “To download all your purchased music for free to multiple devices? About time! Especially as my computer crashed last week.” (And yes, it was a Mac.)

Asked whether he thought a play-anywhere model would mean fewer people opting for streaming services, Ek was also unequivocal: “We believe music should be connected. People want to discover more music. Not just [listen to the] same music.”

But looked at a different way, Apple’s new iTunes in the Cloud service could also spell bad news for these same companies: many of the streaming companies have so far failed to attain a critical mass of subscribers. Some, like Thumbplay, have even gone to the wall for it.

If Apple launching a streaming service would have been a vote of confidence in that business model, then does Apple deciding not to launch one mean a vote of no confidence?

Part of the backstory, as told by bloggers citing sources close to negotiations, was that Apple had just about secured deals with all four major record labels to launch a streaming service. That no streaming service materialized today could have meant those streaming deals didn’t get secured after all. Or that Apple never intended for them to.

The sheer growth of the iOS and iTunes platforms — today Apple said that there are 225 million iTunes accounts worldwide, 200 million iOS devices, and 15 billion music downloads, making it the world’s largest digital music retailer — means that Apple’s new iTunes service, even without a streaming element, will change the game for how other companies will make digital music accessible by consumers.

But that absence of music (and video) streaming also gives existing streaming players — as well as Google (NSDQ: GOOG) and Amazon (NSDQ: AMZN) — the chance to live to compete another day.

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