Cloud music is still the future for Apple, Amazon -- really
Given recent headlines about cloud music, you might be forgiven for thinking that the feature is huge with consumers. Word came Monday that Apple has finally caught up to Google and Amazonand begun to stream songsfrom the company's cloud. The following day,CNET broke news that Amazon is very close to reaching agreements with the top four record companies that would let it run a licensed cloud music service. Music industrysources also told CNET that Google and the labels continue to discusscloud licenses. Interesting news. Now here's the reality: Consumer adoption of cloud music has beenlackluster, multiple music industry insiders tell me. The cloud has notyet led to a spike in interest or music sales, the sources told CNET.Data from The NPD Group supports that conclusion, said Russ Crupnick,the research's company's senior vice president and industry analyst. "Despite the hullabaloo about cloud music, it hasn't gotten tractionyet," Crupnick said, "I looked at our latest numbers and unreleaseddata, and only about 6 percent of the Internet population has evenused something like [cloud music]."Related storiesAmazon getting cloud-music rights, may match iCloud (scoop) Amazon's Cloud Player enters the App StoreComparing Apple iOS 6 with Android 4.0, Windows Phone 7.5Amazon Cloud Player for iOS gives you more options for musicThat data suggests that music listeners are happy with the options they have now. Crupnick suspects that few people own enoughmusic to max out their local storage, which would fuel the desire to store filmand music libraries remotely. Representatives from Apple and Amazondid not respond to interview requests and Google declined to comment.So why are the big music stores bothering to upgrade their music clouds?One reason may be the iPod. Apple and the company's iconic digitalmusic player proved music is a powerful driver of hardware sales.People want to listen to their jams on their mobile devices. Appledidn't care if the company's margins on song sales were thin. All themoney was in selling iPods.Music has been a vital part of digitaldevices ever since. Keep in mind that in addition to being the Web'stop retailer, Amazon is now very much a hardware maker.The "cloud," of course, is the term used to describe where digital stuff "lives" when consumers store theirfiles on a third party's servers rather than on their own PCor mobile device. While this type of data storage is old to techies,it is still relatively new to mainstream America. Heck, among the bigthree music stores, the cloud feature is barely a year old.Amazon was first to launch cloud music with the initially unlicensedCloud Drive and Cloud Player. Google later offered its own anunlicensed cloud-music service. Apple's system was the first to debutfully licensed.The benefits of a licensed service didn't appear to be that compelling-- at least at first. The one thing Apple could offer that Googleand Amazon couldn't was a feature called "scan and match." Apple could scan a user's harddrive and fill their digital lockers with songs from the iTuneslibrary -- eliminating the need for users to upload their songsdirectly to the company's servers. That also prevented Apple fromhaving to store a billion copies of "When the Levee Breaks."Amazon's free Cloud Player app on iOSLance Whitney/CNETDelivering a single copy of a song to millions of users without alicense is a copyright violation, according to the record companies.Apple offers free cloud storage for songs purchased from iTunes butcharges $25 a year to upload songs purchased from other stores,acquired from friends or from illegal peer-to-peer sites. One insidersaid Apple got a great deal from the labels with Match. The companycan give pirated music clemency for about $2 a month.Maybe. While Applehas ballyhooed the growth of iCloud (the service has acquired 125million users in the first six months since launch), the company hasbeen silent about how many people are paying for Match.Obviously, Amazon feels the need to match iCloud's Match. Accordingto music sources, Amazon will charge for at least part of its version of Match.At this point, it looks like an arms race. Apple has Match so Amazonhas to offer it. Whether consumers will eventually care one way or theother is anybody's guess.
