Apple signs majors to iTunes cloud

By Jonny Evans

The Apple [AAPL] social network for music, Ping, seems set to become something you want to use, rather than an embarrassing relative you try to ignore. That's because the company has reached a series of key major label deals to support its mythical cloud-based music services, even as its competitors -- including Google and Amazon -- fail to reach deals for their own unlicensed attempts. We've also learned that Apple has been developing the service for years, with a new patent filing showing a unique approach to service delivery.

ituneslaunch.jpg

[ABOVE: Left to right: Eric Nicoli, then Chairman of EMI Group, Damon Albarn of Gorillaz, Blur and general musical awesomeness, AppleCEO, Steve Jobs, at the April 2007 announcement of DRM-free music sales via iTunes at EMI's London HQ. EMI PR shot.]

School of rock

Apple last night reached agreement with EMI to offer music through the upcoming service. The company reached a similar deal with Warner last month, and CNet tells us deals with Universal and Sony seem set to be reached "as early as next week". The indie labels won't be pleased as they don't appear to have made it into the first tranche of negotiations.

With the deals in place, the technology infrastructure -- including the North Carolina data center all ready to roll -- and huge capital investments already made, Apple seems in position to launch its cloudy venture.

The company is expected to do so at its annual music product revamp in September, but with the iPhone allegedly also set to seize airspace at that event, it wouldn't be surprising to see Apple introduce its new service at WWDC next month.

Update: The service is interesting. Patently Apple this morning published some details of a 2009 patent which confirms just how long Apple has been working on developing the solution.

"Apple's invention is directed to locally storing an initial portion of a media item from a user's library, and requesting a stream of the remaining portion of the media item upon starting local playback of the initial portion." More here.

If you're going to Cupertino

Given that Apple's Lion OS is expected to marshal its own cloud-based elements in the form of the new 'iCloud' MobileMe iteration, and that cloud-based technologies (a la Dropbox, but more secure) are expected to underpin the company's entire device strategy, moving forward, it would be no surprise to see service introduction at WWDC. This would give developers a chance to consider their own implementations of supporting services within Lion when it ships.

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It is of course one in the eye for Google.

Google's unlicensed service launched in March without support from the labels. It is a digital vaults service, which the world's biggest search engine says makes it legal. The labels don't agree and the two sides can't reach a deal because Google doesn't think music's worth paying as much as the labels are demanding for.

That hasn't stopped Google announcing its also unlicensed Google Music service (beta). Can you imagine the reaction if Shawn Fanning had launched such a product without license?

Announcing iTunes in 2001, Jobs was passionate about music. He's a music fan (despite the desperately tragic choice of Chris Martin as the music playout at last year's iPod event). Apple disagrees with Google's assessment as to the value of music as an art form. Giving some value to content has underpinned Apple's iDevice success, after all.

iRock around the clock

This is a really good thing for the music industry, itself unwilling to see any more reductions to its bottom line. It is also a highly interesting twist of fate that an industry which has for a decade denigrated its own music service savior (iTunes) is now turning to iTunes for salvation once again.

I've waffled long enough on the politics of this, so let's quickly look at what the key element to Apple's digital locker service will be:

  • Key advantage: You will be able to access and stream all your music from the Apple cloud without being required to upload all your tracks. The service will scan your drive for your music collection then unlock access to those tracks on the Apple servers.
  • Then you'll be able to play your music on any connected device: a Mac, PC, iPod touch, iPad, iPhone or iPod/iPhone nano.

There's other opportunities. Look to Apple's social network for music, Ping. All told, Ping at present is a little 'Meh'.

One thing Ping does do is allow you to create Playlists which you can share with your followers. Nice, but not especially compelling, because at present all you or your chums can do is listen to 30-second previews for each of those songs. Why is that at all cool or interesting?

Now, introduce the notion that the iTunes cloud will also allow for a Spotify-like music streaming services, and it becomes easy to imagine that Ping will allow you to create playable Playlists to share with friends that they can listen to, share and comment upon. Imagine this as a kind of personal radio station, always available via multiple devices.

Yes sir, I can boogie

Given that this activity could be taking place inside the virtual store of the world's biggest music retailer, I can't help but visualize this as the full realization of the celestial jukebox model the industry has talked about for over a decade -- only with the added advantage of actually offering a viable business plan in which labels and -- far more importantly in my book -- artists actually get paid.

This is exciting stuff.

It is just a shame the services will likely only be available in the US at first.

This will eventually become an international advantage to support iPad sales. This is why I predict Apple will account for the lion's share of the 888.7 million media tablets IHS iSuppli expects we'll see sold by 2015.

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Copyright © 2011 IDG Communications, Inc.

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