There was a lot of clamor in digital music world last week as Amazon unveiled their new Cloud Player. Industry experts labeled it as a move to increase pressure on competitors such as Apple and Google, which are rumored to be releasing similar digital locker products later on this year.
Launched last Tuesday, Amazon’s Cloud Player gives users the ability to listen to their music collection anywhere they have an Internet connection, either via a Web app that’s compatible with all major browsers or an Android app. Amazon trumped Google by creating the first digital locker of it’s kind on Google’s own Android operating system. That’s no small accomplishment, although that makes you think Google is likely planning something even better.
Naturally, all of this is drawing staunch criticism from major record companies who aren’t happy with the Seattle company’s decision not to secure music licenses from labels and publishers before releasing its service.
Sony Music Entertainment already released a statement saying, “We are disappointed that the locker service that Amazon is proposing is unlicensed by Sony Music, and we hope that Amazon will resolve the situation quickly by agreeing to a license with us. We are keeping all our legal options open.” Amazon is now attempting to work with major record companies to reach licensing deal agreements, but until that happens (if that happens) Amazon’s stance is that they essentially do not need licenses to launch their Cloud Player. That’s an issue that major record companies are not prepared to accept, and here’s why.
Major most major record companies have been losing money since ’98/’99 and are clutching at any revenue opportunity they can find to help get them back in the black. What they want is more money and the opportunity to get two points of sale for one item of music. Dume Forwan, owner of Seattle independent music label Fresh Chopped Beats put things in perspective in an email interview:
“This griping is a case of large companies trying to dip their beaks in the pool once and come up with two catches. They want you, the consumer to buy the product up front, and then they want Amazon to pay them again for your right to play it on a different device. Instead of being concerned with what users do with the music they legally own, these companies ought to reconsider their revenue model, take advantage of ‘the long tail’ and prosper.”
He said that most indie labels don’t take umbrage with Amazons Cloud Service at all. It’s mostly the greedy majors that are complaining, but they’re focusing on the wrong angle to make money.
It’s important to note that Amazon’s Cloud Player is not the only digital music locker that’s available. Rdio currently offers similar services and does have a licensing agreement with major record companies, but one has to wonder if that was even necessary. Amazon’s position is this that because the files belong to users, Amazon isn’t required to obtain licenses to be able to store them on its servers and make them accessible to users. From a legal perspective, that seems true.
Let’s not forget that Amazon has a larger war chest than Rdio and is able to go toe to toe in a courtroom over this issue with Sony if that day ever comes.
“Matt Sullivan, head of Seattle indie label Light in the Attic which focuses mostly on licensing retro compilations, also shared his thoughts on the new Cloud Player.”
He admitted not really seeing this as a big issue either and said it was a problem of major record labels trying to “find income from any source possible.”
But he does have concerns about artists being paid properly as their music continues to proliferate via the Web.
“I hope that artists and copyright holders are fairly compensated. Sadly though, that seems to be getting harder and harder with the technology moving at the speed of sound,” he said via email.
Sullivan is right. The onus is on labels like Light in the Attic and others to create record contracts that are favorable to both the music artist and the label itself. Still, expecting music service providers such as Amazon to be strong-armed into paying big record companies doesn’t make sense. If cloud services live up to their potential, this issue will have huge implications for the future of digital music. Let’s all stay tuned.