Amazon is courting record labels as it seeks to obtain licensing agreements and minimize bad blood that could derail its recently launched cloud-based music locker service, according to sources familiar with the matter.
The Seattle, Wash.-based online retailer, which contends that it doesn’t need new licensing rights because online storage is the same as keeping music files on a PC’s hard drive, is trying to reach a deal with major record companies over the new service.
Amazon launched its Cloud Drive and Cloud Driver services earlier this week, which allows users to upload files to a remote storage locker and stream music online and on Android smartphones. In their haste to beat out similar services from Apple and Google, the company rolled out the digital locker and player before obtaining official licensing deals from major record labels, incurring ire and distant rumblings of future legal action.
Amazon did not have any comment on the matter.
Most intellectual property experts say Amazon does have the legal evidence to back up their argument, thanks to a 2007 lawsuit over a “remote DVR” system offered by Cablevision. The suit, which reached the U.S. Supreme Court, ruled that Cablevision could store copies of digital media files on central servers, as long as it maintained separate copies of files for each user.
While legal, this could become inefficient for Amazon, considering their huge customer base and the amount of server space the service could take up. By obtaining licenses, however, Amazon could instead let multiple users stream tracks from the same copy kept on Amazon’s central servers, cutting down on server space.
The streaming feature of Cloud Player, which lets up to five people listen to a track at once, is drawing scrutiny as well. The Cablevision suit allows only one user to view a media file at a time.
Amazon will most likely have to allay some of the music industry’s fear and anger, however, which could lead to legal action that could sidetrack Amazon. Major label EMI sued a similar cloud service, MP3tunes, in 2008, for operating without a streaming license. The case is still pending in New York.
“This is just another land grab,” said Martin Bandier, chairman of Sony/ATV Music Publishing, a joint venture between Sony Music and the estate of Michael Jackson. “I can’t make it any plainer than that. It’s really disrespectful, and of course we are considering all of our options.”
The company’s jump into cloud-based music services will no doubt be closely watched by its rivals Apple and Google, who have been working on media locker services of their own. Negotiating licensing agreements held back both companies from rolling out their own cloud media services. If Amazon succeeds with its current negotiations, it may prompt faster action from both Apple and Google.
Amazon’s Cloud Drive service gives customers 5 gigabytes of storage available free, and users can upload anything from music to video to files. Users who purchase an album from Amazon will be upgraded to 20 gigabytes of Cloud Drive space.