Sam OliverCiting sources in the music industry, CNet's Greg Sandoval reported Friday that Warner Music Group and Apple have reached a deal for Apple's unannounced iTunes cloud service. Warner Music is home to major acts including Linkin Park, Flo Rida and Green Day.
A day earlier it was reported that two of the four major record labels have agreed to Apple's streaming plans. It is unknown whether Warner is one of those two unnamed labels, or a third major player that has signed with Apple.
Apple Vice President Eddy Cue is believed to be in New York in an attempt to reach deals with the remaining labels. Industry executives were quoted as saying that Apple has been "aggressive and thoughtful" in its negotiations.
Exactly how Apple's rumored cloud service will operate and how much, if anything, it will cost to stream music remains unknown. But the fact that Apple is reaching agreements with labels makes it unlikely that Apple's product will rely solely on users uploading their own media, as Amazon has done without record label participation in its own recently launched cloud storage and streaming service.
Earlier Thursday, Reuters reported that Apple has "completed work" on the long-rumored iTunes streaming service. It said Apple is "set to launch" the product, which will allow users to store their songs on a remote server and access them from an Internet-connected device.
Cloud streaming would allow users to access their media, including large music libraries, without needing to take up local storage on an Internet-connected device like an iPhone.
Music industry executives have reportedly agreed to terms with Apple without actually seeing the new streaming product. Apple has only shared "broad strokes" of its plans, but has led those executives to believe that the service could launch "pretty soon."
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24 Comments
If you build it they will come.
Is this the mysterious May event launch? iTunes streaming/MobileMe event?
Just like developers for the Apps Store, Apple should consider direct submission of music and video, especially after the NC facility is already operational. In a similar fashion, artists may do this individually or band together as smaller labels or companies to deal with Apple, just like what is happening now among developers for the Apps Store.
One advantage of this is that, just like developers for the Apps Stores, the artist has the option to set the price of their creations, or even give them away for free as promotion. More than likely, the premium price of music and video from such a setup would not exceed the maximum price of that for record labels. The collateral effect would be a pressure to record labels to "lower" their own prices, if such a direct artists submission becomes successful.
With proper curation (under very defined and more loose rules and policies) and more active promotion, including integration with Ping or similar Apple-based social-networking, quality songs are bound to emerge and will be spread through viral promotion coming from satisfied customers.
Apple could even use its growing Apple Retail Stores as venue to promote such artists. I have seen them doing that now at a smaller scale for artists and writers using Apple products and Apps. Considering how music and video are so critical to the Apple Ecosystem, it should not even be farfetched to explore quasi tie-ups with independent recording and video-editing studios. Quasi in the sense that Apple need not have to own or create these studios but foster their business through subsidies. e.g., for time-restricted exclusive content rights for the Apple Ecosystem
If such a sytem of direct artists submission is created successffully, the Apple Ecosystems for music and mass media may become less dependent on record labels. Apple becomes the de facto "record label" for independent artists and smaller artists collaboratives.
Apple Ecosystems
Amazon's preemptive move to get a cloud music service going without licensing terms helped push the labels in Apple's direction. The labels probably wanted there to be an active bidding situation, but Amazon killed the process by announcing their service. That's a good thing because we're getting the service more quickly, even though Apple's offering may not be much different from what lala was offering before Apple acquired them.
Why is it that Amazon can get away with cloud storage and streaming service and not have to sign any music company contracts? Do they know something that Apple doesn't know or are they allowed to get away with more because Amazon is a smaller company. Maybe as soon as Apple signs up, it will open the door for Amazon to sign. Knowing Amazon's luck, they'll just slide right in and investors will go crazy when shares rocket again.
I'm willing to bet when Apple gets its cloud service up and running, shares will stay flat as ever. Apple will have to offer something special beyond what Amazon can offer in cloud storage if it expects to make any impact with Wall Street. Apple needs to get something back for investing $1 billion unless the data center is only being used to boost hardware sales.