Apple Cloud Has to Serve More Than as an Online Locker to Transform The Music Industry

As we’ve suspected for a long time, Apple is very close to launching an online music service which may go by the name iCloud. The basic idea is that it will mirror your iTunes collection online so that it is available on any device without clunky cable syncing.

While getting rid of those cables will be a big step forward, if iCloud is nothing more than a music locker service it won’t go far towards transforming digital music, as BusinessWeek proclaims. Brad Stone and Andy Fixmer at BusinessWeek report that three out of the four major U.S. music labels have already signed up with Apple, and the fourth is about to sign. This will give Apple a huge advantage over already-announced music services fromAmazon and Google, both of whom failed to secure licenses from the music industry and thus launched with compromised products. Since they don’t have the right licenses for streaming music, they require consumers to upload their music collections to the “locker” services. (Apparently, Google was willing to pay the labels $100 million up front for the music rights, “but talks broke down over the music industry’s concern that search results in Google and YouTube often point to pirated music”). Apple will simply index your collection and mirror it without the need for bulky uploads. Here is how BusinessWeek describes Apple’s upcoming iCloud music service:

Armed with licenses from the music labels and publishers, Apple will be able to scan customers’ digital music libraries in iTunes and quickly mirror their collections on its own servers, say three people briefed on the talks. If the sound quality of a particular song on a user’s hard drive isn’t good enough, Apple will be able to replace it with a higher-quality version. Users of the service will then be able to stream, whenever they want, their songs and albums directly to PCs, iPhones, iPads, and perhaps one day even cars.

. . . While it may be a huge shift, it won’t be free. Apple no doubt has paid dearly for any cloud music licenses, and it’s unclear how much of those costs it will eat or pass on to consumers. One possibility would be to bundle an iCloud digital locker into Apple’s MobileMe online service, which currently costs $99 a year and synchronizes contacts, e-mail, Web bookmarks, and other user data across multiple devices.

So let me get this straight. Apple’s iCloud will be iTunes online, with a few features that make it slightly better than Google’s Music Beta—namely, I won’t have to spend hours uploading my music collection and I will get better quality audio files for some songs. That’s all great, but I am not sure it is enough for me to pay a monthly subscription. If it’s bundled with MobileMe, it certainly would make that service more appealing, but I wouldn’t pay for iCloud as a standalone service if that is all there is to it. And certainly, this could turn out to be only one part of a revamped MobileMe service. Depending on what else will be added, iCloud could help push more MobileMe subscriptions overall.

But let’s take iCloud as a standalone service. If it’s so great, people should be willing to pay for it on its own. But why would I pay a monthly subscription for the privilege to listen to my own music collection streamed from the Internet? I’ve already paid for all those songs, and now I am going to pay again just to have them available online? I don’t think so. Guess what, I can already do that for free with Google Musc beta. Sure, it takes a while to upload all of your songs. But it’s all done in the background with a music manager desktop software that you download. When I did it, I was surprised at how fast my songs became available—so much so that I thought Google was mirroring my collection. (You can see what Google Music Beta looks like in this episode of Fly or Die, which I’ve embedded below).