After month of rumours and tiny snippet leaks of information, Apple’s online music locker/cloud streaming service, likely called iCloud, seems to be becoming a reality as they have signed deals with three of the four major record labels.
Bloomberg are reporting that Apple have already signed up EMI, Sony, and WMG with high hopes of a finalised deal with Universal next week. With the technology and infrastructure likely completed a while ago, sometime in the 18 months since they bought streaming service La La.
There is plenty of competition in the music locker space, both from large corporations – with both Amazon and Google both launching music locker services recently, but also in the independent arena with MP3tunes currently with over 500,000 users having been established all the way back in 2005 – well ahead of the game. The difference between the Apple iCloud service and the other offerings, however, is that they will have label support.
Google, Amazon, and MP3tunes all claim that they do not need any licenses from the labels to let users upload and stream the music they already own, and that may well be the case although there is little precedent here to work from. But with label support Apple will be able to offer other features on top of the basic locker streaming service – users of iCloud may not need to upload their entire music library to cloud to have their music streamable – Apple may just hash-check the files and enable streaming, which would be a major selling point for those with music libraries over a couple of GB. Apple could also offer other added features such as automatically offering the best audio quality for streaming to a device over a certain connection speed, or opening up remix stems of some songs. Most importantly they would be able to stream songs to users that have not purchased the tracks in direct competition with Spotify, Rdio, and other similar offerings – all this with the marketing might and PR halo of Apple – having the labels on side could work very well in their favour.
The obvious downside of these label agreements will be the price. Both Google and Amazon dropped out of talks with the labels due to the labels asking for what they described as unworkable fees. Apple may well have a slightly better deal, but all these costs will be passed down to the consumer in the end, and Apple will need to justify their expense in what is becoming a very competitive marketplace.