Amazon makes a dash for cloud cover

Amazon makes a dash for cloud cover

The digital retailer last week launched Amazon Cloud Drive, offering customers in the US 5GB of storage for free for their music, video, photos and other documents.

Users can buy additional storage space, starting at 20GB for $20 (?12.50) a year, while Amazon MP3 customers who buy a new album will automatically get an upgrade to 20GB of free storage.

Uploaded tracks can then be streamed through the browser's Cloud Player or a dedicated Android app.

One label executive complained to Music Week his company had not granted any licences for locker services. "For the services we license to, we license them the rights to sell our music as downloads," the exec said. "We haven't granted any of these locker services, including Amazon, licences to stream our tracks in full."

Another expert suggested the move was more about Amazon "putting a marker down" as it enters "a music download war" with iTunes, as well as getting a head start on Google.

Both companies are, of course, expected to move into the music-locker space soon, with Google even said to have started internal testing of its cloud music solution.

The expert added, "If the aim of this is to get press coverage for Amazon and to be seen to be stealing a march [on iTunes and Google], it is mission accomplished."

Catch Media is a company that has invested a number of years in negotiating new licence terms with labels and publishers for a white-label cloud-based solution that sits beneath Carphone Warehouse's Play Anywhere offering.

Its chief executive Harry Maloney expressed huge disappointment that Amazon apparently not only launched Cloud Drive without pre-agreeing licences but also issued a statement suggesting no licences were required.

In the statement Amazon argued that Cloud Player is an application that lets customers manage and play their own music - like any number of existing media management applications. It said it therefore did not require a special licence.

"As an industry in the UK, we have to start rattling cages and here is one of the big players, Amazon, [making its move here] and we have to do something," Maloney said.

Lewis Silkin, media, brands and technology partner at Cliff Fluet, explained the argument over licensing will probably come down to Amazon's monetisation of the service.

"If you are charging for such a service, it's very difficult to persuade rights owners that there isn't some element of the subscription they should participate in," he said.

Another expert said Amazon might be breaching the terms of its existing deals with content owners.

"If Amazon has a deal with copyright holders to do X, Y and Z but then starts doing A, B and C, it might be in breach of contract," he said.

Beyond the licensing issues, the new Amazon service could suffer from what is seen as a rather basic user experience, with slow upload times for tracks.

It is these areas that services really must concentrate on, according to Beggars Group head of digital Simon Wheeler. "It all has to be about ease of use and the value you are delivering to the customer," he explained.

In the UK, Tesco is currently working on a cloud-based streaming solution for DVDs, which could potentially be extended into music.

The model sees the retailer sell discs that come with additional rights, meaning they are buying a licence to consume content physically and digitally.

Tesco entertainment director Rob Salter said, "Effectively it's a bundle of rights that comes in a physical package that does not charge the customer twice for the same content."

He accepted, however, that not all rights holders would be happy with this and may seek additional royalties for streaming usage.

That is a potential issue for those people with publishing rights," he said. "But [given the challenges in the market today] I don't think their problem is the thought of selling something twice - it's selling it once."

Lockers are regarded as the next step away from the ownership-based MP3 model and into the on-demand access model.

Several services, such as mSpot and MP3tunes, have already made their play in the market, arguing they do not need additional licences.

But the launch by Amazon and the imminent moves by Apple and Google have all dramatically turned up the heat.

"Competition is good and the more players there are in the marketplace the better," said Maloney.


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