What if being the last person into the pool when it comes to a cloud music service is actually a good strategy?
That might be the case when it comes to Apple’s (AAPL) supposedly developing, and probably imminent, cloud service for iTunes, which, like its competitors in Google (GOOG) and Amazon (AMZN), would allow users to upload their music to an Internet server run by Apple, then stream that content to multiple iOS devices and computers.
GigaOM has a story pointing out the various possibilities, but the central pillar of the argument is that Apple is holding off to get permission to do cloud streaming and a “digital locker” service from the record labels themselves. The music industry is vehemently opposed to digital locker services, saying that it constitutes a new kind of download and distribution and therefore requires new licensing agreements between distributors (in this case, Apple, Google, Amazon and others like mSpot) and the labels. It also adds more fuel to the continuing debate of whether consumers actually own the things they buy.
Amazon and Google have gone ahead and launched their cloud platforms without clearing it with the record labels, maintaining that since users are just uploading and streaming their own content — content they have already paid the record companies to own and use — the service is no different than if users saved digital files to a flash drive or external hard drive. Those devices allow files to be moved between devices and uploaded and downloaded across various pieces of technology — cloud services just streamline the process and open it up through the use of the Internet.
For their part, Amazon and Google pledge to take down any content that violates copyright laws, much the same way YouTube works to cull videos from user accounts that don’t own the rights to them. But the record companies are still fighting the whole issue, and according to the Wall Street Journal, Amazon is scrambling to mend fences with the music industry, since in addition to providing the means of playback and storage, it also wants to sell music as well.
Enter Apple, which is taking its time, smoothing things out with the record labels, and coming in third in the cloud push behind two big and growing competitors in the mobile sphere. But it’s also the only company of the three big distributors that’s willing to negotiate those licenses with the record labels — and that could mean that while Apple cuts a deal with the music industry, the two will also cozy up nice together while Amazon and Google’s “we don’t need no stinking licenses” approach could result in a freeze-out.
And if Apple doesn’t get a deal it wants, it always has a second option: jump the fence with Amazon and Google and spin the story as refusing to charge customers for the privilege of playing back their own music. In essence, Apple holds all the cards and has nothing to lose by waiting things out, so long as it can provide a solid cloud service and a competitive user experience that can make up for the time it has lost.
We’ll have to wait and see if next month’s Apple Worldwide Developers Conference sees the launch of Apple’s cloud music service, but expect it to be an amped-up version of Google’s and Amazon’s. With the support of the music industry behind it, Apple won’t just be competitive — it could continue to be totally dominant in the music market.
