APPLE IN THE CLOUD? FUHGEDDABOUDIT
When the widely read tech reporter phones the captains of industry, they take the call, and he spent all day yesterday grilling his music industry sources, none of whom knew of any specific plans Apple has for replacing Lala on or after May 31, when it shuts down the recently acquired streaming site.
But these sources did confirm to Kafka that Apple has recently started signaling to the labels that it’s interested in launching a Web-based version of iTunes, or what’s being referred to in speculative media coverage as iTunes.com. But those conversations are preliminary at best.
The same sources told Kafka that the tech giant approached the Big Four earlier this year about a cloud-based “locker” service, where users could streams songs they owned to multiple devices. But that went nowhere quickly—“a swing and a miss”, in the words of an industry insider—because the labels had come up with the creative argument that streaming a single purchased download to multiple devices constituted multiple uses, in essence pointing to a rate to several times what Apple had calculated. That chess move effectively ended the discussions before they’d gotten started.
“It’s possible that Apple could argue that it doesn’t need the labels’ permission to launch a locker service, and that users have the right to do whatever they want with their content,” Kafka speculates. “But even if that argument held up legally, it would enrage the labels, who already feel that Steve Jobs hoodwinked them when he set up the iTunes model in 2003. And even if Jobs didn’t mind antagonizing the labels, it would make his current efforts to romance other content providers even more difficult.”
As for related speculation about Apple’s interest in setting up a subscription service, Kafka notes that “no one has figured out how to rent music at a price that satisfies consumers, the labels and the music services. At least not on a large scale.”
What all this appears to indicate is that none of the above scenarios will come to pass until Apple goes through a whole new set of protracted negotiations with the labels, “who might be prickly partners this time around. Hard to see this one getting off the ground and into the cloud in a hurry,” Kafka concludes.
