Apple’s Cloud Music Service

MG Siegler:

Think about it. With these agreements, Apple is likely going to be able to do the one thing that is absolutely crucial for cloud music to take off: offer library syncing without uploading. In other words, Apple now likely be able to do what Lala (the company Apple bought in late 2009 and subsequently shut down) was able to do: scan your hard drive for songs and let you play those songs from their servers without having to upload them yourself.

The cloud music stuff (as Shawn and I talked about here) is going to be very interesting for the next 8 months — as we see how it all plays out. I think Siegler is right about the way the service will work, but I doubt that it will allow you to do this with non-iTunes purchased content.

The problem with allowing users to stream everything in their current library (regardless of where it was purchased) is that some of that music may have not been obtained legally. Now Apple likely does not care about that — Apple just wants their users happy — don’t think for one moment this was not a huge sticking point for the music labels during negotiations with Apple.

The labels do not want you to be able to do this with things Apple can’t verify that you purchased. Doing so would be giving up on the anti-piracy tirade they have been on for most of this century. 1

I don’t know what the service will look like, but I doubt that it will work like most of the optimistic audiophiles hope that it will. I doubt that you will be able to play everything in your library using Apple’s cloud service.

I just don’t see how Apple would have gotten around that in negotiations, unless…

Upgrade

As I talked about in the last B&B podcast episode, I am guessing you will have to pay a one-time cloud upgrade fee on a song by song basis. Perhaps $0.30 a song, maybe less. Once you do that, those songs are available in the cloud. 2

This could be where Apple circumvented the labels. If Apple said we want all the music in the users library to be streamable (so long as we have a deal in place with the label for that music) and further told the labels that in doing so they would charge an upgrade fee that the labels get a percentage of (allowing the labels to double dip [charge twice for the same thing] — which we know they love) I could see the labels going for it.

I could further see the labels being muscled into allowing Apple to charge users to “upgrade” the music in their library that they didn’t buy from iTunes. Thus, pirated or not, all your music would be in Apple’s cloud for a price. I am guessing they would be OK with this because it is a faster way to get money from pirates than court cases are.

This isn’t ideal for the users, Apple, or the labels — it’s a compromise. I hope I am wrong and all the dreamers are right, it would be cheaper for me if I am wrong. I just don’t see the labels bending that much without getting their palms greased first.

  1. It’s nice that we are at the beginning of a new century — allowing me to make such bold sounding statements.
  2. This did this before when they started the ‘plus’ music files.
Originally posted for members on: May 19, 2011
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