Amazon Trying to Pacify Music Labels Over Streaming Service

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So here’s what happened this week.

Tuesday: Amazon launches an online storage service that allows you to upload your music collection for playback over the internet.

Wednesday: The record labels get upset about it.

Thursday (today): Amazon is now apparently trying to hammer out licensing deals with the record labels.

The Wall Street Journal reports that some of the record labels “felt that Amazon gave them inadequate notice of its plans” and now Amazon is trying to strike agreements with the labels after the fact. It’s the old “It’s easier to ask forgiveness than permission” tactic, in other words.

The legality of Amazon’s Cloud Player is being called into question, with a Sony Music spokesperson saying, “We are keeping our legal options open.”

It’s not likely that Amazon launched the service without thinking of possible legal ramifications. The company could very well argue that its Cloud Player is little more than an online backup service built-in music playback functionality. You don’t see the music labels going after backup services like Carbonite and Mozy, for instance, even though those services store music files online just like Amazon’s Cloud Player does.

It’ll be interesting to see if Amazon’s new service greatly increases music purchases on its site and, if so, whether the record labels would back down.

Though Amazon offers five gigabytes of free music storage, any tracks purchased directly from the site don’t count against users’ storage limits and purchasing an entire album gets a user an additional 15 gigabytes of free storage, which entices people to buy their music from Amazon instead of competing music stores. Songs purchased from Amazon instantly appear in users’ Cloud Players, too—they don’t have to be uploaded first.

More music purchased from Amazon because of its Cloud Player equals more money in the coffers of the music industry. Win-win, right? The music industry hasn’t exactly been too forward-thinking over the years when it comes to how the internet works, though, so we’ll see how this all plays out.

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