One Difference Between Apple's Music Locker and Amazon's: Label Deals

Published on April 21, 2011
by Peter Kafka

Yep. Apple is planning a cloud-based music locker service, which will let users stream their music, over the Web, to different devices.

Which may sound a lot like what Amazon rolled out last month.

From the music industry’s perspective, however, there’s a big difference: Amazon started its service without getting approval from the big music labels. But Apple is actively seeking licenses for its service, and will pay the labels for the privilege.

And sources tell me that Apple has already procured deals from at least two of the big four labels (Universal Music Group, Warner Music Group, Sony and EMI) within the last two months. One source tells me Apple content boss Eddy Cue will be in New York tomorrow to try to finalize remaining deals.

“They’ve been very aggressive and thoughtful about it,” says an industry executive. “It feels like they want to go pretty soon.”

Reuters reported earlier today that Apple has “completed work on an online music storage service,” but said the company had not obtained licenses from any labels so far. I’ve asked all four labels for comment; an Apple rep declined to comment.

The industry executives I’ve talked to haven’t seen Apple’s service themselves, but say they’re aware of the broad strokes. The idea is that Apple will let users store songs they’ve purchased from its iTunes store, as well as others songs stored on their hard drives, and listen to them on multiple devices.

Amazon’s service does the same thing, but label executives have argued that a license would allow Apple (or Google, if it moves forward on similar, but stalled, plans) to create a more “robust service” with better user interfaces, sound quality, and other features.

I’ve never understood how a license would affect things like product design, but there’s at least one practical benefit from Apple’s perspective: The deals it is signing will allow it to store a single master copy of a song on its servers, and share that with multiple users.

Amazon’s service, by comparison, works much more like an external hard drive, where users are required to upload a copy of every song they’ll want to get via remote access.

Amazon offers its user a limited amount of storage for free. I don’t know if Apple intends to charge its users for the service, or will absorb the storage and licensing costs on its own.

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