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Record labels are upset over Amazon's Cloud Drive announcement when the online retailer failed to address license-related negotiations

Just yesterday, Amazon announced its new cloud-based storage service called Cloud Drive, which is quite a feat considering the online retailer jumped ahead of huge tech companies like Apple and Google in the race for music streaming services. But now, the music industry is stepping in, and could possibly slow Amazon's progress.  

Cloud-based music storage has become a popular option for those who use multiple devices. For companies like Amazon, this method of music streaming is a great alternative to relying on CD sales. While other companies continue working on their versions of cloud-based services, such as Apple's MobileMe music component called a "locker," and Google's music service that was rumored to be released with the new Honeycomb launch (but reports are now saying that Google execs are still in the midst of chatting with record labels), Amazon leaped ahead of the game with Cloud Drive, which offers 5 GB of online storage for free and saves album or MP3 purchases to the cloud automatically.

Customers can upgrade to 20 GB of space by purchasing an MP3 album. Also, the Cloud Player allows users to play their music through a PC, Mac or Android-based phones. However, those with an Apple iPhone cannot partake in Amazon's new service.

But now, Amazon may be running into some trouble with record labels, like Sony Music, who was angered by Amazon's new service launch "without new licenses for music streaming." 

"We hope that they'll reach a new license deal," said Liz Young, a spokeswoman for Sony. "But we're keeping all of our legal options open."

Record labels were informed of the new Amazon service last week, and Amazon had not yet addressed license-related negotiations at that point. An executive close to the Amazon discussions, who preferred to remain anonymous due to the confidentiality of the discussions, noted that Amazon's new service might be considered illegal to those in the music industry.  

"I've never seen a company of their size make an announcement, launch a service and simultaneously say they're trying to get licenses," said the executive. 

While users are allowed to store music files on their own computers, it is "unclear whether they have that right when they use remote storage services offered by cloud computing." 

A similar situation occurred in 2007 when EMI sued MP3tunes because they offered a service similar to Amazon's.  

"The labels have engaged in a legal terror campaign over the last 10 years using litigation to try and slow technology progress," said Michael Robertson, MP3tunes founder, regarding the Amazon situation.

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Record Companies Are Obsolete
By StraightCashHomey on 3/30/2011 11:03:40 AM , Rating: 2
The need for music stores is quickly becoming non-existant. 90% or more of the albums you would buy from a music store (overly priced, especially) contain only 2 or 3 songs that you actually want from the album. It is much more cost effective and conveninent to buy individual songs from an online vendor. You don't have to drive anywhere. You just click "download" and you have it.

Weren't record companies originally around to help artists get their name out? With the information age and websites like YouTube these days, artists who are starting out don't exactly need to sell their souls to the record companies to get their name out there. If they are good, they will probably get recognized. At that point, they don't need record companies to be the middle man in all of this, and they could just sell their own stuff through the web and pocket all of the money they make.

Digital media should be sold per user. Once you buy it, you own it. You should be able to store it and keep it wherever you want.

RE: Record Companies Are Obsolete
By tng on 3/30/2011 5:44:27 PM , Rating: 2
Weren't record companies originally around to help artists get their name out? With the information age and websites like YouTube these days, artists who are starting out don't exactly need to sell their souls to the record companies to get their name out there.
Well, record companies are there primarily to make money. It just so happened that the most effective way to do that was to promote artists, sell records, promote live shows, etc....

Now in the 21st century it is easier just to underpay the artist for their contribution, overcharge the consumer and have hoards of ill-mannered lawyers sue everybody.

Really I don't think that any artist will have as much as a reach as he would without the major label involvement. Yes there is Youtube and a whole host of other web based ways to distribute music, but it is not as efficient as putting it on the radio or a TV ad in primetime.

As a person here in the comment mentioned, Radiohead has a new release out on the web. This is new to me and I love them. How many other potential songs are out there that I would love and I just don't know about them because of the limited nature of my web browsing?

Really, I drive about 3 hours a day and listen to a combo of Ipod and radio, this is my downtime where I listen for new stuff to add to my liabrary and I can't sort through Youtube while driving. Having something on Youtube is great if you know what you are looking for, but there is so much stuff that just going there and choosing at random is sometimes fun, but normally it is difficult to find something from any online source with just a short snippet of a tune in your head.

"Google fired a shot heard 'round the world, and now a second American company has answered the call to defend the rights of the Chinese people." -- Rep. Christopher H. Smith (R-N.J.)

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