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iTunes in the Cloud and Why This Scares Me

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Apple’s (s aapl) recent media event solidified what we all knew was coming: Rentals and non-local storage is the future of our digital content. Ask any teenager if they’d rather watch TV or YouTube and they’ll answer Google’s (s goog) on-demand free service full of people doing stuff on video is their preferred entertainment. Give that teen an iPhone or iPad and YouTube is where they’ll go first. It’s appealing to have content that’s not stored locally streamed instantly and Apple/Google aren’t the only companies leading this initiative.

Right now, most of the content you own is stored locally on our Macs or iOS devices. This content includes apps, books, videos, music and documents. The cutting edge techies have embraced Gmail, Google Docs and cloud services like DropBox and Box.net. The only thing keeping you from storing movies in the cloud and viewing those on your iPad is Internet speed. What if I told you the copy of Finding Nemo you bought from iTunes can be streamed instantly to any Apple device no matter where you were in the world — a café, driving down the interstate or in the London tube? It’s almost here.

Our future is wireless at speeds that meet what we have in our homes. This may be a decade away and if carriers make wireless data truly unlimited this will be a reality, but it scares me for a few very obvious reasons that simply can’t be fixed by technology.

Corporate Control of Our Data

Control by a single entity is my main fear. Cloud storage isn’t democratized and it isn’t open. Currently, when you buy something, it’s stored, owned and managed by the company you purchased it from. Apple has maintained DRM in its iTunes Store since 2003. I’ve authorized files that I bought the day Apple’s store opened and they still play on any one of my Apple devices. If I lose that song, Apple can allow me to re-download it after some back and forth with its support team. My apps, movies, music and music videos are locked to its devices. The same goes with Amazon’s (s amzn) Kindle platform. Buying a book from Amazon’s Kindle Store means that file is locked to its software and hardware. If it ever abandons Kindle, your books are useless. There’s no reason for either of these companies to do this, but people who bought music from stores that are now defunct are in a bit of a pickle with the content.

An example of a failed system is Microsoft’s (s msft) PlaysForSure DRM. A number of music stores and MP3 players adopted this, but most of those stores and hardware companies have shifted directions or gone out of business. The hundreds you spent on music may be playable right now but no one can guarantee you’ll be able to in 10 years.

Let’s simply alter my argument a bit and change the delivery of this content from DRMed files stored on your hard drive to music stored on the cloud operated by Napster or Real’s Rhapsody Store. If those services go away, the music you “own” is no longer playable…ever. Going all in on a service that is cloud based is risky business. The same goes for content stored on Google Docs, Flickr, MobileMe and YouTube. If you’re not keeping hard copies of your content uploaded to these services, you’re a fool. Hard drives are cheap. Store your content and don’t rely on these web services that have been around for less than a few years to store your content forever. Personally, I use Backupify.com to keep secondary backups of all my data from Gmail, Google Docs, Twitter, Facebook, Flickr and WordPress. I download copies from Backupify once a month to my hard drive.

Remember when Amazon ironically pulled copies of 1984 from Kindle devices without warning? Cloud based companies can do this. They might give you a warning but no one can come into your house and take a book. Unless what you’re storing is illegal or your hard drives are compromised, the data in your home and on your computer is safe for years as long as you’re careful. Keeping a backup of your computers on an external drive at home and a duplicate at your office is good enough and I suggest anyone do that no matter how insignificant the data is. If you store photos, music and documents on your computer, back it up off-site — no exceptions.

Apple is playing it safe with its new Apple TV. Allowing us to stream rented movies and TV shows is a good way to get us comfortable with streaming content. You can still buy the same content on your iOS and Mac devices and stream those to the Apple TV but, if you’re on a TV browsing iTunes, the only option is to rent the content.

It won’t be like this forever. Soon, streaming will be offered as a more convenient and less expensive option for us. Apple and other companies will present products where you can hit play on anything you’ve ever purchased and it starts instantly as long as you have an Internet connection from your phone, tablet and computer. Invite a friend to borrow your copy of Braveheart and they can watch it as well. This convenience will not be without problems.

In Apple We Trust

Apple is on top right now. Its mobile devices are envied by every CE company, but this won’t be the reality forever. I own 300 iOS apps, 1,200 movies, 200 music videos and over 18,000 songs where over 5,000 of those songs were purchased in iTunes. I’ve invested thousands of dollars in Apple. Thanks to limited kindness of the music industry, my music is now DRM free in iTunes Plus format so it can be played on any other MP3 player, but the other content is stuck. When Apple’s devices aren’t the best and someone else takes over, I’ll be stuck to the Apple ecosystem. The same can be said for Mac software when you make the switch to Windows 7 (for whatever reason) but it’s a reality we all need to deal with.

When you want to switch to a cooler and better mobile platform, will you be okay with giving up the thousands spent on DRMed content that can’t be played on the new device? If Apple remains the dominant leader for the next 20 years, can we trust it to be kind to its loyal fans who trust when we buy a movie stored exclusively on Apple’s cloud to always be playable and never be pulled, removed or changed? Will my copy of Braveheart always work no matter where I am or will I be greeted with an error when I’m in China with, “this movie is not licensed to be played in your region.” Where the hard copy stored on my iPad would play just fine no matter where I was? We’ll see. Apple is not a movie studio so its hands are tied when it comes to content and how that content plays just as much as any other company when it comes to music and movies.

The White Album Argument

Maybe I’m not seeing the big picture. There’s another side to this where if you ask anyone over the age of 50 how many times they’ve bought The Beatles’ White Album and they won’t be able to keep count. There was record, 8-track, tape, cassette and maybe even mini-disk. They probably also bought it in CD form the first, second and third time it was remastered. You may have bought this album eight times since it was first available in record stores.

Perhaps that’s how it’s going to be when it comes to our digital music. Perhaps, you’ll buy the same content over and over again well into your old age because there would have been a few music services between 2000 and 2050. On my 70th birthday, I may lament to my grandkids that I spent thousands on music in iTunes and they’ll laugh because music is like $20 a song now and I shouldn’t be complaining that it cost 99 cents back then.

Planning for the Future

Whatever happens next, consumers are in control. We decide with our cold hard cash. We already voted that digital is the future since iTunes sales will pass the sales of physical CDs very soon, but if we go all-in on cloud content trusting in the corporations storing and delivering it, the world may shift immensely and when you take a vacation to the mountains with your family where there’s limited cell reception, the music, movies and important work documents will all be inaccessible stored in some server that’s unreachable and you’ll have to laugh because this was the future we all wanted that corporations gave us.

Maybe I’m skeptical, but the best content is physical (bookshelf) with a digital version (non-DRM) and a backup of that digital copy off-site. If your house burns down, you’ll still have the book or CD digitally but the world we’re entering into is all digital with single corporations holding the DRM keys and now they want to store the content as well. It’s unclear what’s going to happen next. Let’s hope we know what we’re doing.

Related GigaOM Pro Research: How to Manage Access to Digital Content

57 Responses to “iTunes in the Cloud and Why This Scares Me”

  1. Amir Samary

    I did’t read all comments but I think everybody is missing the point here. Every change happens on the market first and, then on the juridical/government/regulation instances later. I am not sure we have seen much of these yet but I am sure they will happen.
    For instance, here in latin america, countries’ governments like Brazil and Chile are implementing phone number portability allowing you to keep your phone number when changing carriers. I don’t see how this could be different from what you are talking about.
    In short, we must fight to have good regulations to allow us to move if we feel we want to. The content we bought is ours and if we move to another “carrier”, it should be told so, so that we can see our content there too. If they are going cloud, they must pay the price for it. As we are giving them more power, they should deal with the additional responsibility as well.

    Honestly, will you really trust the people to buy or not buy something as a way to protest about a model? Most people don’t think about the future as you do. If you really want to make a difference and interfere, try changing the speech and start talking about government regulations, portability, etc.

    By the way: I also prefer to rent for $0.99 then to buy for what ever and I also agree that listening to must (and buying it) is different and seeing movies (and renting then). I think both models will be available in the future (rent and buying) and that is why I think portability and regulations are the most important thing to discuss.

    Kind regards,
    Amir Samary

  2. It is more interesting to think about whether you’ll be able to get the artist, filmaker or author. Will exclusivity deals limit your choice to particular services, want to buy the Beatles online, oh no, you can’t.

    Those back catalogues, are the publishers going to bother to put it online. To date the answer appears to be no.

    Used Apples iTunes search, found what your looking for? It’s not that good, a lot of metadata is missing that might make it useful.

    A lot of this is fixable, but there has to be a will to do it. Most companies are only interested in their current offerings not the back catalogue. The real scare is that you might never be able to get the item you’d like because someone can’t be bothered to make it available to you.

  3. IMHO we should be thanking Steve Jobs for dragging the music industry into the 21st Century. The Big Four all hate Apple because we as consumers benefit more from iTunes than the oligopolies that control traditional music distribution. And have you forgotten that Apple REMOVED DRM from iTunes music? Where would we be without Apple? Stuck in a world where four multinational conglomerates conspire and collude to control the music we listen to while successfully stifling all attempts to bring music to the Internet.

  4. dan garrett

    a minor point – you don’t, and probably never have, owned any software or music/movies/whatever. you _licensed_ it but you had a locally stored copy (on DVD, CD, diskette, vinyl or whatever). so it felt like owning it but it was (and is) a mirage. like many people i have my own doubts about not-my-managed storage. but the gory specifics about what you can/can’t do with the digital copies, even DRM-free licenses, isn’t your decision. IMHO a lack of tangible media in my control is the Really Big Deal, not how you’re connected to the storage mechanism with “your” files. my own solution is to get music/movies/software on some physical media _and_ put copies out in the cloud (clearly violating most license agreements). but that way if someone else closes my connection to some remote storage i can restore it elsewhere.

  5. The Voice of Reason

    You miss an important point.

    You Assume that you own the music you have bought on itunes! You do not! You Have been conned!

    When we bought music in physical format, if we decided we no longer wanted that music we could sell the physical object second hand.

    You are not allowed to sell your MP3 second hand. the terms and conditions of your purchase from itunes preclude it.
    In my opinion if you cant sell it, you don’t own it.

    A court ruling has recently backed this point of view up, clearly ruling that itunes sells a license to listen, not a copy of the music. (the case happened because musicians get different rates of royalty for licensing their music than selling it)

    With a model like spotify you pay a subscription and receive a license to listen to all of the music, on any device that has a spotify player app installed.

    It doesn’t matter if that’s your computer or your mobile,or you could be at a friend’s house, and log in to your music account on their machine.

    A much more viable solution.

    The notion of having a record collection is obsolete, you pay to acess the record collection of humanity. Personal taste and discover is defined by your playlists.

    Until anyone solves this I would recommend you don’t buy music through itunes- you don’t actually own it. Buy the CD and rip it or subscribe to a service like spotify.

  6. Oh, and Apple didn’t ever “go bankrupt.” They were in financial trouble before Steve Jobs returned because Apple lost it’s focus on what makes it Apple, NOT because of closed-source. Instead of focusing on unique, cutting-edge hardware and software they were making the same beige boxes everyone else was. If closed, proprietary systems don’t make money, explain Windows.

    And I am mystified as to why people who hate Apple’s products so much care about the freedom of those of us who like them. I bought both my iPhones and my iPad knowing Flash was not available. I bought my HTC EVO 4G with the idea that Flash was supported. Guess what? Flash on Froyo may as well not be there for as often as it works without extensive hacking. I enjoy a little hardware hacking in my spare time but my mobile devices are for convenience. They should just work. I love my EVO, but not because of Flash support, because the vast majority of Flash, and none of it that I care about, is supported. Since you consider the iPad a crappy device and don’t want one, why do you care if it supports Flash? I love it, without Flash. It’s not as if you’re being forced to buy one. Feel free to take a pass.

  7. This is a twisted argument that doesn’t even fit the facts. First of all, storing PURCHASED content in the cloud and RENTAL content in the cloud are two different animals. I want my PURCHASED content stored locally, and this is still an option from iTunes. In fact, PURCHASED content will be handled pretty much the same way as it always has. The $0.99 RENTALS can be stored in the cloud and streamed. Why this is a problem I can’t see. I currently rent TONS of content from Amazon and I LOVE the fact that it is streamed and not downloaded. I don’t want rental movies on my HD unless I’m getting ready for a long trip where I might need some content while I’m outside wifi range–like on an airplane. USUALLY, I rent a movie at the time I want to view it, despite the fact that I can wait up to 30 days to watch it. I can’t see why I would want to rent today to watch it in 3 weeks, for example. I do usually rent a few movies a few DAYS before a trip and download them, as I said, for when I’m out of wifi range, but MOST of my rental content is NOT downloaded. Nothing Apple is offering is really new. It’s available from Amazon and Hulu and Netflix and others already. Apple TV will simply make it easier for the less tech saavy.

    As to iTunes $0.99 MUSIC? It is ALREADY non-DRMed .aac format music that you can play with any player that supports .aac (and that is MANY players on all major OS’s) and also easily recoded to mp3 or, if you’re worried that mp3 (which is, technically, proprietary) will not always be free, ogg vorbis or FLAC.

    This article does not contain a single real fact, just a bunch of straw men. Grow up people.

    BTW, DRM-free is courtesy of Apple, NOT the music industry. Apple has campaigned for DRM-free since day one. They offered DRM only as long as they were required to, even after the music industry tried to strong arm them by allowing Amazon to sell DRM-free music while requiring iTunes to use DRM. NOTHING about DRM is good for Apple. When the RIAA, the MPAA, the television networks, book publishers and the other content providers realize that it isn’t in their own interest to treat their customers like criminals that will change. I guarantee Apple will jump om DRM-free as soon as content providers allow them to.

  8. This is a twisted argument that doesn’t even fit the facts. First of all, storing PURCHASED content in the cloud and RENTAL content in the cloud are two different animals. I want my PURCHASED content stored locally, and this is still an option from iTunes. In fact, PURCHASED content will be handled pretty much the same way as it always has. The $0.99 RENTALS can be stored in the cloud and streamed. Why this is a problem I can’t see. I currently rent TONS of content from Amazon and I LOVE the fact that it is streamed and not downloaded. I don’t want rental movies on my HD unless I’m getting ready for a long trip where I might need some content while I’m outside wifi range–like on an airplane. USUALLY, I rent a movie at the time I want to view it, despite the fact that I can wait up to 30 days to watch it. I can’t see why I would want to rent today to watch it in 3 weeks, for example. I do usually rent a few movies a few DAYS before a trip and download them, as I said, for when I’m out of wifi range, but MOST of my rental content is NOT downloaded. Nothing Apple is offering is really new. It’s available from Amazon and Hulu and Netflix and others already. Apple TV will simply make it easier for the less tech saavy.

    As to iTunes $0.99 MUSIC? It is ALREADY non-DRMed .aac format music that you can play with any player that supports .aac (and that is MANY players on all major OS’s) and also easily recoded to mp3 or, if you’re worried that mp3 (which is, technically, proprietary) will not always be free, ogg vorbis or FLAC.

    This article does not contain a single real fact, just a bunch of straw men. Grow up people.

  9. Michael Long

    Why the focus on Apple and Amazon? It’s not their fault that iTunes and the Kindle store have DRM’ed content.

    You need to be ranting at Time Warner and Viacom and New Corps and Bantam and Random House. It’s the studios and the publishers who are hanging onto the old models, much as the music studios did earlier on.

    The iTunes store accounts for a mere 6% of Apple’s revenue. In case you’re bad at math, that means that 94% of their revenue comes from selling hardware: iPods, iPhones, iPads, and Macs. Cheap, easily available content helps Apple sell hardware. That’s their bread and butter.

    So don’t rant at Apple. Rant at the publishers. Tell them you want DRM-free, device-independent content. Tell them that they need to get with the program.

    The music industry did it. So can they.

  10. GM was once the envy of the auto industry and look where they are. Certainly Apple will not remain on top forever. It is just never in the cards. Woolworth used to be the number one retailer and does anybody shop there anymore. I could go on and on, but why bother. Democratic Capitalism has a way of rotating those on top with those on the bottom, or somewhere in between. It is true for countries and for corporations alike.

    Let us not forget it was not many years ago that Apple almost ceased to exist. They seem to only be able to execute when Jobs is at the helm. What happens when he moves on in one way or another. Who’s to say the next CEO would be as smart as he is. And let us not forget that Apple had the desktop publishing and pc arena all to itself and MS came along and cleaned there clock. Most computers are still running Windows and in the pc arena Apple is still an also-ran.

  11. Blu-ray may be a bag of hurt for those who want to put us into digital downloads, but I’m sticking with that for the time being. It’s better than any download, and eventually, we’ll be able to rip it to some non-DRM media.

    Movie rental is probably the better choice for those we don’t want to buy in Blu-ray format. I converted all my iTunes purchases to iTunes Plus. But most of my music is ripped from used CDs from Amazon.

    • I have to agree with you, I only use iTunes to sync the bare minimum to my iPhone. Otherwise I’m on my Zune for music. The only complaint with Zune is being forced to sync it at least once every 30 days to renew the DRM on the subscription tracks (it lives in the car a lot).