Apple Could Win the Cloud Music Game Thanks to Google and Amazon
Google announced its new cloud music service Tuesday, May 10, and Amazon.com (AMZN) revealed its own Cloud Player in late March. At this point, Apple (AAPL) is really the last major player to make its move. But judging by the offerings so far, that might work to Apple's advantage.
Both Google (GOOG) and Amazon have decided that seeking special licensing for cloud music playback isn't necessary, and that they're allowed to offer their services without seeking any additional consent or agreements from major record labels. Google has announced that it will take down any music found to be in violation of copyright agreements, in much the same way it does with YouTube content.Amazon, likewise, has taken a similar stance, arguing that they "do not need a license to make Cloud Player available" since saving files to Cloud Drive "is the same as if a customer were to save their music to an external hard drive or even iTunes."
There's definitely a sound logic to that argument, but even so, Amazon seems to be rushing to smooth things over with its music content partners, according to the Wall Street Journal. Which makes sense, because Amazon also wants to control the sales channel for music, as well as the means of its storage and playback.
Apple's Waiting Arms
While Amazon and Google may be trying to make nice with major labels behind the scenes, the "shoot first, ask questions later" approach hasn't won them any allies. And, in fact, it could send those content providers rushing into Apple's arms.
Apple is said to be still in talks with the four major record labels ahead of the launch of its own cloud music service, and in this case, patience may prove to be a virtue. No doubt the labels are reluctant to give up any additional revenue they might be able to garner through cloud-based offerings, but Apple is now in a unique position with regard to negotiating proper licenses, since Google and Amazon have both taken a firm, public stance on the other side of the fence. Simply put, Apple is now the only game in town.
Even if Apple can't reach a favorable agreement with record labels, it can still easily go the route of Amazon and Google before it and declare cloud music services are well within its existing rights. But while that's an option, it's one that Apple shouldn't have to exercise. Instead, it can use its leverage as the music industry's biggest current distribution channel, and the reluctance of Amazon and Google to play nice to force an agreement that would see it be able to offer a label-friendly solution which would ultimately probably benefit consumers. That could take the shape of fewer restrictions on how and when music can be accessed and transferred between devices, and make it possible to purchase a wider variety of music that's immediately available directly from the cloud.
Apple's service will look and work better than that of its competitors, at a minimum. And if it can also launch soon (like at WWDC next month) and with the full backing of the four major record labels, it'll best its rivals in all categories, and continue to dominate mobile music.
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