Google And Amazon May Have Just Handed Apple The Keys To The Cloud Music Kingdom

With regard to their cloud music offering, it looks like Apple is now just about ready to rock and roll. It would seem that this is now coming together even faster than they anticipated. And that may be thanks to two unlikely sources: Google and Amazon.

CNet’s Greg Sandoval is reporting tonight that Apple has signed an agreement with music label EMI to offer its music through Apple’s upcoming new cloud music service. This means that Apple now has agreements in place with two of the four major labels (Warner signed last month). And Sandoval believes that deals with the remaining two, Sony and Universal, could be wrapped up as early as next week. Again, rock and roll.

With those deals in place, it means that Apple will be free to launch their cloud service anytime they please. And while we had heard the initial plan was to do so at their annual music event in the early fall, Apple could indeed move the launch up to WWDC in early June (just a few weeks from now). We haven’t heard anything definitive about this either way, but you can bet that Apple is thinking about it.

It would be a pretty savvy move. One that would make their rivals look bad. Really bad.

You see, while Apple is believed to have had the infrastructure work done for a while for their cloud music offering, the hold up was these label deals. Negotiations have been ongoing for months, and given the stakes, it seems likely that they could have gone on for many more months. Then Amazon decided to get ballsy.

They launched their own cloud music service in March without any of the labels signed on, surprising everyone. Legally, they said they had the right to do this since customers are placing this music in digital vaults in the cloud in the same way they might put music on an MP3 player. The labels, not surprisingly, disagree.

When Amazon did that, Google, which had also been negotiating with the music labels for at least a year, also decided they needed to get their offering out there. Last week at Google I/O, they launched Google Music in beta. Again, the labels were pissed off.

And guess who they ran to?

As Sandoval reported last week, following Google’s Music announcement:

Nonetheless, the hope in the music industry is that Apple’s music service will make the competing offerings look shabby by comparison and force Amazon and Google to pay the licensing rates the labels are asking.

So the labels, which for the better part of a decade now have been looking for someone, anyone to help counter Apple’s power in their business, is turning right back to Apple when they need help. And Apple will obviously gladly welcome them with open arms. After all, with these licenses, Apple will have secured the cloud music high ground despite being the last to launch.

Think about it. With these agreements, Apple is likely going to be able to do the one thing that is absolutely crucial for cloud music to take off: offer library syncing without uploading. In other words, Apple now likely be able to do what Lala (the company Apple bought in late 2009 and subsequently shut down) was able to do: scan your hard drive for songs and let you play those songs from their servers without having to upload them yourself.

It’s hard to overstate how critical this is. Right now, Amazon makes you upload your own library for any song you haven’t purchased from them since their service launched (those you purchase from them can automatically be added to your locker). Google doesn’t even have a music purchase option at all yet, so you have to upload music.

As Jason and I talked about on OMG/JK this week, that means hours or days of uploading — that’s what he had to go through. How many people are realistically going to do that? Not a lot.

But because neither Amazon nor Google have the label agreements — the key thing we warned about months ago when people were buzzing about Google Music rumors — they have no choice. Apple has a choice. And will fully take advantage of it.

Both Amazon and Google have complained that the terms the labels want are unacceptable and untenable for a business. Yet, it looks like Apple has been able to work them out. And that may well be thanks to, yep, Amazon and Google.