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Who Will Create iTunes for the Cloud?

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If you’re like me, your digital media life is messy. If I were to take inventory of where all my digital media resides, the list would include Flickr, Facebook, iTunes, Android, Netflix, YouTube, Picasa, Flipshare, Amazon, Kindle, iBooks, Windows PC, Mac, iPad and so on.

Like I said, a mess.

And while I’m an early adopter, I’m probably not very different from tens of millions of consumers who face digital media anarchy every day across the various screens, accounts and software populating their life.

Apple is the first company to even come close to helping us manage this chaos, with iTunes. After it was first introduced a decade ago, the service became hugely popular partly because it was the first cohesive management tool for first music, then later other types of media.

But iTunes has gotten flabby with age, and the creaking has gotten more noticeable lately as the cloud becomes more and more important for digital media storage. In a way, iTunes has become the Windows of consumer media management — dominant but a relic of a past era.

The bottom line is that consumers want their media storage simpler, not more complicated; the push of content upward into the cloud presents that opportunity, not just for  Apple, but for a handful of competitors as well. Proximity and control over content management and playback means a bigger stake in consumer purchase behavior (both for content itself and, in the case of Apple, the playback devices).  The bigger the stake, the more monetization through a direct storefront, affiliate/partner, or advertising.

So who could — and should — create iTunes in the cloud?

Google. Google has already entered the e-book market, but its rumored music locker is perhaps the best indication of what a Google trans-media management service would look like: purchase, rights locker, playback and sharing. As with most things Google, any cross-media management service it offers will be tied back to a consumer’s single account, most likely Gmail.

Facebook. The social network behemoth is the world’s biggest digital photo site at this point, has payments, is device-agnostic and has growing platform ambitions. However, anything Facebook does will likely center on sharing and possibly purchase; it will likely leave the heavy lifting management to someone else.

Amazon. Perhaps the biggest dark horse is Amazon. While the company is largely about purchases today, it’s shown with Kindle it can do a well-executed digital content management platform. Since the company clearly sees all forms of content as a big growth area, who’s to say it won’t eventually extend its reach beyond e-books and create an iTunes for the cloud?

Apple. But let’s be real. This is Apple’s race to lose, and all indications suggest that Cupertino is looking to revamp iTunes to the new reality of cloud-based media. The only question is whether another competitor with less baggage (and by baggage I mean installed base and proprietary hardware) will get there first.

For more analysis of why owning the consumer media cloud is the new battleground for digital media, see my weekly update at GigaOM Pro (subscription required).

Image courtesy of: flickr user sjon

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30 Responses to “Who Will Create iTunes for the Cloud?”

  1. What about services like Spotify and rdio? They offer an über-affordable cloud music approach. Spotify also offers a lot of social and can manage your own library. If they developed a greater social platform (they must have the infrastructure to!) they could take the lead!

  2. This is really Apple’s game to lose. With the acquision of LaLa, they have what they need to win here.

    I was an avid user of LaLa which truly was iTunes in the cloud: it allowed you to sync your iTunes Library intelligently (didn’t upload mp3s it already had in the cloud), no client to update (stop the madness, Apple!), listen anywhere, purchase “cloud version” of the songs for $.10 and had awesome social media and discovery tools. The community features were great for discovering new music – I miss the people I followed there.

    It was not a surprise that Apple purchased them – The business model, the experience, the features were all better than iTunes. What is a surprise is that they have done NOTHING with LaLa. Ping is a joke compared to LaLa – I imagine they must be working on a launch of Lala, likely it’s very hard to scale to the iTunes customer base because of all the streaming required.

    The only other player in the space to win here is Pandora, because of their brand and community. But they would need to integrate somehow with iPods and add a way to manage a collection. Pandora would need an acquisition to put all the pieces together.

    • Lala was innovative however they were also crippled by music industry restrictions and cost structure.

      You couldn’t really “listen anywhere” because Lala for forbidden from offering mobile players. They had the technology but no licenses because big music companies look at web music and mobile music as 2 separate things and charge considerably more for mobile. There were plenty of other restrictions too like no downloads, no caching, and US only.

      I expect Apple to be a laggard of moving to the cloud for a few reasons.

      1) They’re the leader. Leaders don’t have to take risks and blaze new trail cause they’re already in 1st place.

      2) Apple is PC centered. Everything revolves around their PC software iTunes. Buy an iPad and you can’t even use it without bolting it to a PC running iTunes. It’s a completely new model to be cloud centric instead of PC centric.

      3) Apple’s massive installed based make any migration an extra challenge. Moving the 150 million iTunes users to the cloud is a massive job. It will take years.

      Apple will move to the cloud when other companies start taking away their customers with their cloud offerings. Right now my company MP3tunes has 700,000 users which is tiny. But if we grow that number, if HP gets into the game, if Real and Google get into the personal cloud game then Apple might be compelled to move.

      — MR

    • Grooveshark is what most people who tried it use and it’s spreading like wildfire due to it’s intuitive design, on demand anywhere availability via mobile/desktop with “Pandora like” intelligent radio and premium feel…it’s what the experience will be a few years from now that we take for granted…kind of like how the iPod/iPhone made how we interact on the go with our music so easily become the norm.

      The Future is Now and those that have tried already know this…

    • Grooveshark really does rock with its intuitive design and its simplicity as well as the music loads so fast. Go Grooveshark they are the future of music. Let the industry wake up now and jump on the grooveshark bandwagon before its too late!

  3. So, what I really want to know is given the increasing costs of Storage, even with advanced technologies like NetApp delivers, why oh why is there more than one perfect copy of ‘Yellow Submarine’ bu the Beatles… Shouldn’t we all be listening to just one extremely ‘cached’ file? Wan to sole the data center issues with all the content providers, cure piracy, etc? Make sure only one copy of it exists, bu everyone has access and that caching servers exist everywhere. Even make IPODs/MP3/Media players just caching systems. Keeping one copy refreshed against a single master.

    There only needs to be one copy of ‘The Illiad’ in a perfect digital world. Ok, more than one, make sure things are well backed up all over the place, but really, just one key holder…

    THAT is the Cloud. There only needs to be ONE, cached many times, updated in a single location, shared services/content = huge decrease in support, operations and maintenance costs.

    • Niels,

      Copyright law is not about efficiency. So the “one copy for all” is not realistic. In fact, major record label EMI is suing my company MP3tunes for using deduplication. Deduplication is used by every major internet company offering an online service. There’s no online service (email, file storage, photo, etc) who doesn’t use deduplication. It’s on by default in every copy of Microsoft Exchange and has been for many years.

      Yet the record labels are suing for its use. This is not the “one file for everyone” you’re talking about. Rather this is “if people upload identical bit strings there’s no need to keep hundreds of identical copies.”

      — MR

      • Agree with you here – Rightsholders need to get over that issue. As long as they get royalties for every time their song gets played, they should be happy. If it’s multiple copies in the cloud, controlled and protected by a business, that has to be better than multiple copies shared across dropbox, memory sticks, torrents etc.

  4. I guess the author is one of those anything but Microsoft. It is funny how zune already offering cloud-base music service and was not mentioned. If you have a zune pass, there is nothing remotely close as valuable of Unlimited streaming + 10 free songs a month. And, in the event that your computer goes down, just re-download zune, use your hotmail account and good to go. Way better than Itune with a best UI.

    • USC Trojan

      HA, *exactly* my point, John. And the “honorable mention” Michael said he will make, was actually in the comments section. Unbelievable how these guys can pass off as journalists.

  5. MP3tunes has already created “iTunes in the cloud” at least for your music. We have 700,000 users, storing a petabyte of music. More importantly we have an open API so that music is playable on a wide range of net aware devices including:

    – iphones/ipad
    – Android
    – WebOS
    – Windows 7
    – Internet radios (like those from Logitech and Grace Digital)
    – Video players (Roku and Tivo)

    It’s Mac/Win/Lin friendly and users can get invites for 10gbs of storage. If Apple builds something it will only work with Apple equipment. Instead the world needs an open solution and that’s what MP3tunes is.
    — MR

  6. Isn’t e.g. Spotify exactly that?

    The problem with e.g. our family is that a big portion of the music we have in our local iTunes library isn’t available on iTunes nor Spotify. Mainstream music is easy as are some popular classics, but the more your taste goes into the niches or music that’s part of a dancing culture (like various genres of latin music), the less you can find from iTunes or Spotify. The music just doesn’t come from the big labels, or perhaps isn’t that well available in the US at all (cuban music).

    What we would like to see the most is an integration of cloud + local music.

    The big difference is that video is mostly watched once, only a small number of people watch the sames movies or TV series again and again. However the same music is played many times and some music will stay alive for years or decades.

    • USC Trojan

      @Petri – forget it, this author is not going to write about such things because it possibly would take too much time to do research.

      Spotify and Zune Pass effectively eliminate the need to get “my” collection up in the cloud. And, Zune has movies, TV shows, music videos, etc. in addition to just music.

      • USC Trojan -just fyi – I was joking to your question about Zune above. For you, I will give them honorable mention :)

        Obviously there are other companies than the ones mentioned above and I wish I could cover more in a 500 word piece (that’s what comments are for).

        I think Zune and Microsoft is a legitimate competitor here, and they bring alot of assets to the table (they probably have the strongest living room presence of all the players above with Xbox). However, Microsoft historically slow-moving compared to other companies mentioned, and I question if they can move as fast as Google or Amazon to offer a true cloud-centric iTunes. I like what they’ve done with Zune – it shows what lack of installed base can allow you do – but my worry is they’ll force integration with too much proprietary Microsoft offerings and it’ll kill what momentum they have.

      • USC Trojan

        Michael, I appreciate the clarification re- the joking part. Now I feel a little better :-)

        However, the topic of your post does not talk about the agility of getting an iTunes in the cloud, is it? It is about who can get there. I believe Zune *is* there. The last time I played a song from my library? More than a few months ago, before I signed up for Zune Pass, before I got my Windows Phone 7. With Zune Pass, XBOX, WP7 and my computer (Mac and Windows), I am able to stream any of their songs for free, unlimited and on-demand. I can also make “Smart DJ” based on albums, artists and songs and I have eliminted the need for a Spotify or a Pandora. In fact, Zune is smart enough to actually create the Smart DJ playlist based on local, network AND internet music, thereby reducing data charges.

        I was joking about honorable mention. I am actually saying it should be at the top of the list. Forget waiting for Spotify in the US, you don’t need it if you have a Zune Pass and Zune Pass-compatible devices like an XBOX or a Windows Phone 7/Zune HD.

        Talking about agility – how long has amazonmp3 been around? And what have they done with their stuff? You can’t be serious about your argument why Microsoft was not mentioned (ability to put it together).

  7. Good post – and I wish someone would make an aggressive move here.
    Not sure Amazon is such a dark horse. I think they’ve invested a lot into digital downloads with only a modest return. Most of the music I buy is Amazon MP3s. I think the only way they really break through in a dominant position would be to move it to the cloud. And the LOVEFiLM acquisition gets them deeper into streaming.
    If you want a dark horse, what about Netflix? I think they would need a partner who’s in the music space already, but they certainly have built the infrastructure to support it.

    • @Barry – Good point – Netflix makes sense as a darkhorse. They will need really broaden their scope beyond video entertainment, and I’m not sure they’ll do that in the next few years given the big investment they’ll need to make in entertainment licensing. BUT – If they were to buy a Pandora/ Spotify and maybe someone like a Sugarsync, develop a real storefront, they may put together the pieces.

  8. I think handing over storage to others is a little scary. Amazon has deleted videos that it previously said I owned, and I’ve had no recourse after they were gone. Yes, I could have backed them up on my hard drive before they were deleted, but then why do I need the cloud?

  9. USC Trojan

    Umm, are you ignoring Microsoft with it’s Zune media catalog? Zune Pass already offers me WAY more than my music collection for streaming from multitude of devices, keeps my movies in a digital locker so I can buy once, view anywhere (instant stream 1080P HD!) and you don’t even offer an honorable mention?


  10. How about not relying on any of the monoliths mentioned above?

    Now that S3/CloudFront supports it, I just place my music up there, stream it to my phone, desktop top, whatever I want. Cost 1/100th (hundredths) of a penny to do so.

    • @Todd – I think for early adopters w/some technical know-how, that’s a good solution. But for the vast majority of consumers, simplicity is key. Unless there’s a simple interface and one-click drop across screens, something like S3/Cloudfront won’t attract a mass-market audience.

      I agree, though, the incumbents don’t have to be the solution, but reach and resources will inevitably play a part in what offering consumers ultimately choose.