Amazon In The Cloud

The launch of Amazon Inc.’s new cloud drive and cloud player services has both the tech world and the music industry in a frenzy. Although it was the next logical step in music technology, experts have expressed their surprise that it was Amazon and not Apple or Google to get things going.

The term “cloud” refers to files that have been uploaded to the Internet and are available from any computer. This is the sole function of Amazon’s cloud drive; creating one spot for you to host you music files so that they can be accessed from all of your personal and work computers and even your Smartphone. “These are all separate collections you have to manage,” said Brian Coley, the Editor of CNET. “What Amazon is saying is keep it all on the cloud, which means just on the internet, and access it through any laptop, any Smartphone, any tablet and connected cars. So you’re moving it from a bunch of hard drives to one place on the internet.”

The first deal Amazon is offering includes 5Gb of free storage space, which is only a little more than 1000 songs. However, with the purchase and download of any one of Amazon’s MP3 albums you receive 20Gb storage for the first year. After that deals start at 20Gb for $20 a year, which is infinitely less than you would spend on multiple external hard drives when backing up your files.

While the cloud drive allows users to upload documents, photos, videos, and music files, Amazon’s cloud player allows backed-up music files to be played directly from the hosting site. The player is relatively simple in its design, but has play, pause, and skip buttons. It also allows for the user to create playlists, which will exist on all computers you might use to access the cloud, and all Smartphone’s with Google’s android operating software. It does not have compatibility with the iPhone and other Apple products. This could be due to Apple’s own plans to launch a cloud service. Both Apple and Google seem to have cloud projects in the making.

While many bloggers and tech enthusiasts have been praising the cloud drive technology, there has also been backlash from record labels, claiming that Amazon does not have the appropriate licensing rights for what the music locker service allows. And another issue that Record Labels have with this system is that it is impossible for Amazon to distinguish between uploaded files that were purchased legally and ones that were illegally downloaded. Amazon did not even address the issue of licensing until after the new items had been launched, scheduling a negotiation meeting only after an outcry from Sony Music. “I’ve never seen a company of their size make an announcement, launch their services, and simultaneous say they’re trying to get licenses,” said an executive at the scheduled discussions who asked to stay anonymous.

Craig Pape, the director of music at Amazon, has been doing his best to stave off the allegations. “We don’t need a license to store music,” he argued in an interview with New York Times. “The function is the same as an external hard drive.”

At this point, people are unsure of who is in the right. With each new music technology that is introduced, the legalities are less defined. For obvious reasons, music publishers and record labels would prefer that listeners buy a new copy of a song for each system that they would use to listen to it. Most experts have been describing the situation as being legally ambiguous. Either way, when an idea is as potentially profitable as streamlining cloud technology, record companies are going to want a piece of the pie. “We hope that they’ll reach a new licensing deal,” commented Sony Spokeswoman, Liz Young. “But we’re keeping all of our legal options open.”

It is not the first time cloud technology has come under legal scrutiny, though it has never occurred before that two heavy-hitters in the music industry have come head-to-head over such an issue. In 2007, EMI sued MP3tunes.com over a similar file hosting technology. Although the 2007 legal battle tipped in favor of those opposing cloud technology, Michael Robertson, founder of MP3tunes, feels confident that record labels cannot halt the advancement of the music tech world any longer. “The labels have engaged in a legal terror campaign over the last 10 years using litigation to try and slow technology progress.”

If anyone can take on the majors in this battle it would be one of the three Internet Superpowers: Amazon, Apple, or Google. The licensing agreements decided in the current discussions with Amazon could affect the future of all corporations that have plans to implement cloud technology of their own. Both Google and Spotify have a temporary hold on introducing similar services while they negotiate with the music publishers and labels. The record label executives are smart–they know that whatever bargain they strike with Amazon will be expected by all other parties too. In short, it may all come down to the outcome of this exchange.

Despite the adversity brought on by Sony and other labels, the music locker service has wielded great results. On Nasdaq, Amazon rose 3.1 percent, closing at $174.62, while Apple fell 0.2 percent. This may not seem like much, but Amazon has been sitting on the sidelines for years now while Apple has been ruling the digital music world. “Amazon needs to establish a strong post-CD role for its music customers, [and] this smartly positioned locker service is an important first step in building a future role,” stated Mark Mulligan, a Forrester research analyst. “As logical a next step in the digital music market as locker services might be, they’re not an innovation in the music product. They’re simply giving people access to the music they have on the devices they own.”

It is true, the cloud drive service isn’t revolutionizing the future of technology, but it is giving people the convenience of having their full music catalogue at their fingertips wherever they go. There is some worry about whether the music locker technology will also lead to a new variety of piracy.

If people can access their music files from anywhere, what is to stop them from sharing with their friends? Amazon, has not yet addressed this issue directly. Craig Pape, director of music at Amazon seems confident that the service will drive more purchases of digital music, by encouraging people to purchase music files on the go or from secondary computers. “At the end of the day we’re trying to delight customers, but we’re trying to sell more music too,” says Pape.

Experts in the industry are hopeful that when the licensing discussions will come to a close, Amazon and other companies will be able to slowly refine their new technology. It is unclear how long the licensing discussions will last, but it is almost certain that locker services will become more important in time and redefine access to music yet again.

By Athena Frost

References

http://blogs.barrons.com/techtraderdaily/2011/03/29/amazon-music-locker-shows-cloud-rush-is-on-says-lazard/

http://www.reuters.com/article/2011/03/29/us-amazon-idUSTRE72S13H20110329

Tech Watch: Amazon Introduces A New Music Locker, Beating Apple And Google
http://www.billboard.biz/bbbiz/industry/digital-and-mobile/amazon-labels-to-meet-for-locker-talks-sources-1005132532.story
http://www.businessweek.com/magazine/content/11_15/b4223043644684.htm

http://www.pcmag.com/article2/0,2817,2382779,00.asp

http://www.thestreet.com/video/11066093/amazons-music-locker-is-good-business.html

http://news.cnet.com/8301-31001_3-20047303-261.html

http://techcrunch.com/2011/03/29/founders-of-mp3-com-mspot-on-amazons-music-locker-all-eyes-on-the-labels/

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