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Amazon's Cloud Storage Gets Negative Response from Labels

Major record labels want to establish licenses for such services

March 31, 2011 4:20 PM ET
Amazon's Cloud Storage Gets Negative Response from Labels

When Amazon launched its new Cloud Drive service on Tuesday, the digital retailer did so without establishing licensing deals with record labels, which has led to a very negative response from major labels. The service – which allows customers to store their music files on Amazon's servers and stream the music on portable players – has some ambiguous legality, which has led competitors such as Google and Apple to hold off on debuting similar services in order to deal with licensing issues. Billboard's sources indicate that many labels are studying Amazon's service to determine whether or not it has broken copyright laws or the terms of existing deals.

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"We don't believe we need licenses to store customers' files," Amazon's Director of Music Craig Pape told Billboard, explaining that the company does not see a difference between their service and a customer backing up files on an external hard drive. That said, the Wall Street Journal has reported that Amazon is reaching out to labels for licensing deals necessary to launch more advanced features within their Cloud service, such as song and playlist sharing and Pandora-like music discovery options.

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It's easy to see why major record labels are eager to set up proper licensing deals. Cloud storage is just hitting the market now, but all signs point in the direction of it becoming a huge part of how we will listen to music in the near future. Labels are hoping to get in on the ground floor and establish ways to profit from this new technology before it's too late to stake a legal claim on a potentially enormous source of revenue.

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For the moment, giant corporations such as Amazon, Google and Apple have the bandwidth and development resources necessary to create and market cloud storage services on a large scale, but it won't be long before this technology becomes widespread. There are already companies such as mSpot and Carbonite who provide similar "digital locker" services that can be accessed on mobile devices.

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