Amazon’s New Cloud – A Storm on the Horizon
on April 1, 2011 at 9:54 AM
Amazon’s cloud-based storage system, Cloud Drive, was recently launched, offering Amazon customers 5GB of online storage space for their digital files. These days, an internet locker isn’t exactly news, but Amazon has also launched a companion music-streaming application called Cloud Player that lets users play their MP3s over the internet through a browser or Android device (but none of that iOS Apple stuff). What makes Amazon’s recent actions so interesting is that it is practically begging for a lawsuit, or at least a strongly worded letter, from the recording industry because all of this Amazon-server-to-users’-ears streaming is taking place without any sort of copyright licensing.
Obviously, Amazon doesn’t think the licenses are necessary. The way they do see it, saving your music to your Cloud Drive is the same as putting it on an external hard drive. Instead of physically owning the hard drive, users rent storage space from Amazon, complete with convenient web access. It’s important to note that any sort of digital file can be stored in the cloud, not just music. However, Amazon is clearly using the application to increase its presence in the mp3 scene. In addition to the Cloud Player streaming, users who purchase an album from Amazon’s mp3 store can get a free upgrade to 20GB. Amazon mp3 purchases are also automatically added to your Cloud Drive and don’t even count toward the storage limit.
This is all fine and good, but what does the recording industry think? Pretty much what you’d expect them to think. To be fair, reactions have been somewhat guarded so far (although it hasn’t even been a week), but I think it’s safe to assume that the labels aren’t exactly thrilled. I haven’t run across a quote specifically calling the service illegal, but we can probably figure that the music industry would prefer to license the rights to store and stream other people’s music to Amazon. In fact, both Apple and Google have their own cloud music services in the works, and both are believed to be working hard toward licensing deals with the major labels.
And this is where Amazon is likely to run into trouble. The labels can’t just sit around on this because they’re still in negotiation with Apple and Google. If Amazon is free to do its thing without either a license or a lawsuit, there’s no way Apple or Google are going to pay for the privilege. That said, Amazon is still looking to get license agreements in place. Deal or not, Amazon’s priority was obviously to be the first to market with this service, which they’ve done. Even if they always intended to pay for the licenses, by doing it this way they not only beat both rivals out the door, but also attract quite a bit more media attention in the process.
But exactly how legal is the unlicensed Amazon Cloud Drive, anyway? Needless to say, it’s not entirely clear. MP3.com used a similar setup ten years ago, but ended being sued into the ground by Universal Music Group. One major difference between MP3.com and Amazon is that MP3.com created a music database by simply purchasing and ripping thousands of cds. It didn’t give users access to music they didn’t already own, which they established by putting a physical disc into a drive, but this wasn’t enough to make up for the wholesale copying. Amazon, on the other hand, simply offers storage space. Users upload their own music, so any download they make is necessarily a copy of what they already own, as opposed to a copy of a cd that MP3.com purchased. And if you’re thinking that this sounds like a completely trivial and semantic difference, I’d be inclined to agree.
At the same time, I have difficulty explaining why Amazon is doing anything wrong. Assuming I paid for the music in the first place, why shouldn’t I be able to store it outside of my house, especially if I’m not sharing it with anyone else? How is it different from hiring a professional iPod handler to follow me around and hold my iPod for me? I could tell him what I wanted to hear and he’d just have to hit play. Isn’t that basically what Cloud Player does?
One last thing I want to mention. The Amazon Cloud Drive situation is not completely unlike the new online service Zediva. Zediva does streaming movie rentals, and is also attempting to bypass the copyright holder licensing process. Of course, renting out movies deals with performance rights, which are not the same as the copying rights at issue with Cloud Drive. Nevertheless, it’s clear that they way we access media over the internet continues to evolve and, if nothing else, a little more competitive innovation is good for everyone.