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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 Labels Need to Die
By TheRealArdrid on 3/30/2011 12:35:09 PM , Rating: 2
Sorry, boys, Amazon is on firm legal footing here. You'll have to try and extort more of your customers to shore up your ailing business model.

Amazon doesn't need to negotiate, or acquire, new licenses for the streaming of music because the Cloud Drive is not being sold as a streaming music service ; rather, it's being sold as a service that allows a user to stream the music they already own . That's a very important distinction to make because, under the first sale doctrine, a consumer can do whatever they damn well please with the works they've legally purchased.

If one were to agree with the record labels point of view, every device/service that a user could use for streaming (i.e. network storage, DropBox, DNLA capable devices, etc.) would need a license. I'm sure Sony wouldn't appreciate it if the other labels tried to shake them down for licensing fees for my use of my PSP to connect to my networked PS3 to stream my music from my PC .

Now, I'm sure they'll try to resort to their ever expanding view of the public performance right, but, good luck with that one when there are tons of devices that allow for streaming and don't require licenses from the labels. I really hope Amazon gets sued just so I can sit back and watch the labels get owned.

RE: Record Labels Need to Die
By mooty on 3/31/2011 1:37:07 PM , Rating: 2
In the eyes of the "music industry" you may pay for a piece of music. In fact you better pay for it multiple times. After that, anything you do with your purchase is illegal.

It's pathetic, and it needs to end.

"People Don't Respect Confidentiality in This Industry" -- Sony Computer Entertainment of America President and CEO Jack Tretton

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