Apple Paying Music Labels Up to $150 Million for iCloud Streaming Rights?

[HobeSoundDarryl]

I'm sure I'm missing something here, but what's the value of storing my music in the cloud? I'm old fashioned, but I like my music stored on my local device. Its more reliable than my link to the cloud.

We don't have a complete answer yet. But if the focus is solely on music, the value of iCloud is ready access to music NOT synced and ready access to buying more music anywhere you have Internet access. In short, there's some value in convenience of anywhere, anytime access.

Barring that, it seems an iCloud service at $25 or more dollars is probably going to have to come with a bunch of other benefits to justify the cost (which is not just the $25+ but also the potentially added costs in the 3G tolls because streaming services probably encourage more 3G data burn).

I think this is going to be a tough sale for Apple because it requires the involvement of the likes of AT&T, Verizon, etc for its benefits to be realized to the fullest. I'm sure the parts that Apple controls will be "gee whiz" but regardless of what is revealed, the problem will still be that to make some kind of cloud service work anywhere & anytime, you have to have an anywhere & anytime connection to it. That's a 3G/4G (almost requirement) which comes with those companies working to constrain how much data is streamed with GB tiers and pricing. More simply, it appears an Apple iCloud service is going to be encouraging much MORE wireless Internet usage while the keepers of the wireless Internet access are encouraging much LESS usage with tiers and pricing adjustments.

What's missing in all of this is some rumors of how Apple is going to bypass those bandwidth gatekeepers... how Apple is going to make it possible for us to anytime & anywhere connect to the iCloud WITHOUT having to pay the tariffs to AT&T, Verizon, etc. As long as the latter is involved, wallets will be emptied as wireless internet demand goes up.

 

[charlituna]

Wonder how many people don't own iTunes music

Quite a few. And more have a mix.

According to my sources, the free is only what you bought on iTunes. There is a charge for the upgrade that lets you use all music regardless of source. The bulk of which goes to the labels etc.

And the $100-150 million per label is on top of that cut.

 

[davidgrimm]

I'm sure you won't lose the local storing option, but now you'll have both options.

I hope so. I spend a lot of time out in the "sticks" on a motorcycle. The cloud doesn't extend there very well and my singing is not very good.

I've recently made the switch from early adopter to old timer. I've just lost my desire to replace things that work for me with things I don't know. Well, except for new motorcycles, but they don't really work differently from the prior year models.

 

[GQB]

Curious why they just don't take the Google and Amazon path and use the middle finger to the labels.

In the long run, could be a lot less than 150MM in legal fees.

Seems odd to keep feeding this 30 year old model. IDK

And people wonder why the record companies' assumption is that geeks are theives at heart.
I'm curious... how do you think Ford would feel if you could make unlimited copies of their cars digitally? Would you say that they're 'evil' for wanting to prevent that?

(disclaimer... I think the record companies are jerks for the way that they rip off artists and try to resell crap over and over. But that's another issue.)

 

[blackpond]

This will never happen because if Apple makes a mistake then they are giving out music for free. Huge liability.

At least if someone uploads pirated music to the cloud Amazon or Google can say, we don't verify the data, they are the ones that uploaded the pirated music.

Another way to look at this though is: why care if they upload pirated music? The act of piracy has already occurred. And now, with this new Apple deal, the labels are making streaming royalties on pirated tracks.

 

[davidgrimm]

Back in the day I downloaded "a few"" songs from Napster and imported "a few" CD's I borrowed from friends. I hope I can store these in the (i)cloud someday. Am I alone in my thinking?

No you're not. I have 3,919 items in my iTunes library, most of them came from CDs I purchased and then imported. Any "only iTunes" solution will not be very useful for my music. Video is another story since its harder to get your video library loaded into iTunes.

 

[hansende]

No.

Unless there's some kind of sync-like buffering where you've pre-loaded (again sync-like) what you'll want to listen to in wireless internet-free zones like that (and subways, etc), if you can't link to this iCloud, you can't stream from/to it.

This problem is one of the most fundamental issues to the dream of having everything in the cloud (and it's beyond Apple's ability to solve within iOS, OS X, and/or Apple hardware development; instead, they must depend on other partners to cover their parts). Paired with this other perception of "thin clients" (little to no local storage, everything is streamed), it means that when you can't link to the iCloud such thin clients would be dumb clients incapable of doing (perhaps) anything until you are again able to make a connection.

I just don't see us getting there. Syncing & local storage seem to be a requirement until there is wireless internet everywhere. I have a hard time seeing us get to a wireless internet everywhere world even over the next decade or more (especially with the likes of Verizon & AT&T dominating the space).

Also if I am in a travelling out in the country away from cell phone coverage and wi-fi the same is true?

 

[HyperZboy]

Is that really the SONY Music logo?

It looks like some blood lump I sneezed out of my nose last week during the cold/flu and terrible nosebleed I had.

 

[rolfbert]

Wow, Steve Jobs must be an idiot to not see what all you posters see. Yeah, he must not have thought about using iCloud for more than music, and he must not realize that people might not have all of their music from iTunes, and he's totally unaware of capped broadband issues, and he certainly misses the point that sometimes you might not have access to WiFi.

Good thing you are all here to educate Steve on these totally obvious issues that Apple couldn't possibly have taken into consideration when building iCloud.

Or you could wait until Monday.

Like he overcame the limitations of not being able to play Blu Ray, or not having decent GPUs? I'm really looking forward how mighty Steve is going to delimit everyones broadband connection...

 

[Full of Win]

We don't have a complete answer yet. But if the focus is solely on music, the value of iCloud is ready access to music NOT synced and ready access to buying more music anywhere you have Internet access. In short, there's some value in convenience of anywhere, anytime access.

Barring that, it seems an iCloud service at $25 or more dollars is probably going to have to come with a bunch of other benefits to justify the cost (which is not just the $25+ but also the potentially added costs in the 3G tolls because streaming services probably encourage more 3G data burn).

I think this is going to be a tough sale for Apple because it requires the involvement of the likes of AT&T, Verizon, etc for its benefits to be realized to the fullest. I'm sure the parts that Apple controls will be "gee whiz" but regardless of what is revealed, the problem will still be that to make some kind of cloud service work anywhere & anytime, you have to have an anywhere & anytime connection to it. That's a 3G/4G (almost requirement) which comes with those companies working to constrain how much data is streamed with GB tiers and pricing. More simply, it appears an Apple iCloud service is going to be encouraging much MORE wireless Internet usage while the keepers of the wireless Internet access are encouraging much LESS usage with tiers and pricing adjustments.

What's missing in all of this is some rumors of how Apple is going to bypass those bandwidth gatekeepers... how Apple is going to make it possible for us to anytime & anywhere connect to the iCloud WITHOUT having to pay the tariffs to AT&T, Verizon, etc. As long as the latter is involved, wallets will be emptied as wireless internet demand goes up.

1. There are plenty if other streaming services, such as NetFlix and Pandora. AFAIK, these did bot have to get special permission from AT&T or Verizion.

2. Many will have locat WiFi and not stream over 3G

 

[Dan--]

What this whole thing would enable is a cheap music (media) players with almost no local storage, but with a connection.

However, in order to be really useful, you need to have ubiquitous access - for free, or VERY low cost. We don't really have that, and aren't really getting there real soon, as Darryl points out.

Unless there's some kind of sync-like buffering where you've pre-loaded (again sync-like) what you'll want to listen to in wireless internet-free zones like that (and subways, etc), if you can't link to this iCloud, you can't stream from/to it.

This problem is one of the most fundamental issues to the dream of having everything in the cloud (and it's beyond Apple's ability to solve within iOS, OS X, and/or Apple hardware development; instead, they must depend on other partners to cover their parts). Paired with this other perception of "thin clients" (little to no local storage, everything is streamed), it means that when you can't link to the iCloud such thin clients would be dumb clients incapable of doing (perhaps) anything until you are again able to make a connection.

I just don't see us getting there. Syncing & local storage seem to be a requirement until there is wireless internet everywhere. I have a hard time seeing us get to a wireless internet everywhere world even over the next decade or more (especially with the likes of Verizon & AT&T dominating the space).

 

[charlituna]

Why would they shell out that much for locker permission. And people would buy that instead of free with google and amazon?

Because the labels will argue that the streaming is a form of broadcasting which they didn't give Google and Amazon the right to do. And unlike Dropbox etc, A&G are pitching this specifically to post and stream music so they can't claim they are providing an empty box and be in the clear.

Even if A&G get around any law suits over the streaming, the labels could pull content at the next contract talks. And argue that Amazon has to pull all that content out of their cloud service because they have no rights to it in any form or fashion. Which would kill the service

Apple was willing to share the wealth, ask before doing and keep things friendly with the labels. So no worries for them

 

[Sackvillenb]

I have to say, I find the marketing and branding of "cloud" based services rather amusing... since it's essentially just a synonym for server... or internet...

But, the "cloud" is pretty darn useful! I think it's biggest limitation now is just the infrastructure needed to convey this data... not so much for speed or capacity (depending on your country), but cost... I know many places have reasonable fees for internet usage with appropriate or even large data caps... like the U.S., in general, for example... but other places (*cough* Canada *cough*) have such high internet fees with such low data bandwidth caps that it will prevent users from really using the cloud... unless you have lots of money to burn...! But this should change over time... I hope...

 

[ten-oak-druid]

You know I am really starting to think this is not about storing your music but rather paying for the right to stream water music is available.

Amazon didn't go after licenses from the music industry for users to just store their music on the cloud. Why would Apple do this?

There is no way Apple could hide the cloud and we all know they like surprise people. So they probably leaked stories about this being a service where you upload files instead of what it really is.

 

[HobeSoundDarryl]

Wow, Steve Jobs must be an idiot to not see what all you posters see. Yeah, he must not have thought about using iCloud for more than music, and he must not realize that people might not have all of their music from iTunes, and he's totally unaware of capped broadband issues, and he certainly misses the point that sometimes you might not have access to WiFi.

Good thing you are all here to educate Steve on these totally obvious issues that Apple couldn't possibly have taken into consideration when building iCloud.

Or you could wait until Monday.

Steve will have to pull a lot of revolutionary rabbits out of his hat on Monday to address the 2 I've bolded above. Personally, I'm sure iCloud is about more than just music. After that one, all of the other points you make require other players (music industry, wireless Internet players) to do something that seems like anything that overly helps Apple and us consumers (via lower prices or free) comes at their direct expense.

Those rabbits will need to be whoppers to overcome this problem. OR, iCloud fans who really want streaming everything to/from the cloud will have to just be happy paying up for that kind of service (which is not just Apple's new fee to iCloud, but also the data fees).

It doesn't matter how much Apple has thought about it. In the end, SOMEONE will have to pay for the connection to the iCloud. It will not be Apple paying on our behalf. Some kind of ad model won't cover the cost (else, we would already have free 3G service plans paid for by ads). It won't be the remarkable generosity of AT&T and Verizon waving fees to help Apple be more successful. Who's left?

 

[HobeSoundDarryl]

Also if I am in a travelling out in the country away from cell phone coverage and wi-fi the same is true?

Right. Just think about the "cloud" like a unlimited hard drive. You can put the hard drive anywhere you like, but to access what's on it whenever you want to access it, you need a connection to it. Where there is no way to connect to the Internet there is no access to the cloud.

 

[Brendon Bauer]

And the $100-150 million per label is on top of that cut.

$100-150 million total, not per label. Unless your "sources" know more .

 

[HobeSoundDarryl]

1. There are plenty if other streaming services, such as NetFlix and Pandora. AFAIK, these did bot have to get special permission from AT&T or Verizion.

2. Many will have locat WiFi and not stream over 3G

Right. But the dream of access ANYWHERE and ANYTIME is not possible if we limit it to "when I can get local WIFI." If you have access to local wifi why not just use something like Pogoplug http://www.pogoplug.com/ and stream from your own cloud (all of your content, not just what you've purchased from iTunes)?

And, I didn't say they have to get permission from AT&T and Verizon. They don't. AT&T and Verizon are probably more excited about an iCloud offering than we are. After all, anything that motivates people to want to burn more 3G data is great for business billings.

 

[blackpond]

It doesn't matter how much Apple has thought about it. In the end, SOMEONE will have to pay for the connection to the iCloud. It will not be Apple paying on our behalf. Some kind of ad model won't cover the cost (else, we would already have free 3G service plans paid for by ads). It won't be the remarkable generosity of AT&T and Verizon waving fees to help Apple be more successful. Who's left?

You're assuming everyone who uses the service will be out and about. I for one would be happy to use it in the home with my broadband connection. Am I the only one who consumes media at home these days?

 

[henrycooksey]

If this iCloud thing really is up there with IOS 5 and Lion, would it really be just about music, and would music even be delivered under that name. I'm just thinking about the logical flow of the event, so there's IOS5, then Lion, then iCloud, which glues the two together, finally breaking the PC/Mac-iPhone/iPad/iPod connection and making things more portable. But then, one more thing... iTunes subscriptions?

I'm finding it hard to imagine icloud as just a music service... otherwise there'd be an itunesesque music note in the logo/icon.

 

[vrDrew]

Reading through the comments, its increasingly obvious why most of you people DON'T run successful technology and media companies.

While the full extent of iCloud's capabilities is still far from clear, most people seem to be overlooking one HUGE advantage of Apple's approach (ie. licensing and paying the music labels) over that of Amazon and Google: It will save consumers the hassle of having to UPLOAD their music files.

Even consumers with fairly fast download service (ie. >10 mb/s) still have pitifully slow UPLOAD speeds. Think about how long it would take you to upload a 15 - 30 gB music library. And think about how doing so would impact your usage caps.

iCloud will, instead, scan through you music library: If it recognizes a music file, it will instead "tag" your account to a copy of that file ALREADY ON the iCloud servers. It will not only prevent 30 million iTunes users from wasting the bandwidth to upload their own personal copy of Lady Gaga's Poker Face - but it will also save Apple the storage costs of maintaining 30 million copies of the same music file. THAT'S what Apple's $150 million payment gets them, us, and the Internets.

The details of how, exactly, this will play out still are to be revealed. I don't know, for instance, how its going to handle untagged mp3s. Or even music that was ripped from CDs - although I think its likely that most of these will be recognized the same way that iTunes uses the Gracenotes database when you rip a CD to iTunes.

 

[hansende]

When you download a song it is streamed to you once. When it comes from the cloud it is streamed as many times at it is played. Seems that will clog up the internet and cell phone lines especially when it is used for video (like Netflix).

 

[KingCrimson]

If it's iTunes only content, this will be another failure from Apple.

iTunes only content on icloud = Ping 2

Yes Apple has failed all the way to $60 billion cash horde.

 

[OllyW]

You're assuming everyone who uses the service will be out and about. I for one would be happy to use it in the home with my broadband connection. Am I the only one who consumes media at home these days?

If you are restricted to iTunes purchased content on iCloud won't you already have those songs at home?

 

[shartypants]

I love how forward thinking Apple is, I really hope the rumor is true that iCloud will detect music you already own and then just give you access to it from iCloud. It makes the most sense, people are going to listen to music they have (whether obtained via another source, CD or illegally), so why not give them access. The huge advantage for Apple is that they don't have to store massive number of copies of the same music. Although I don't like ads, I can definitely see them having ads (at least for any free or trial version), another way to attract the record labels.