Tuesday, April 12, 2011

Amazon & Music Lockers

Well the debate about whether Amazon needed licenses to launch its new music locker service is heating up.

On the one side Amazon seems to suggest that it is doing the industry a favor - they state there is a consumer pain point with respect to the availability of their music and that by introducing a service that allows people to stream their music from anywhere they are, they are addressing a current short fall in the industry. Their argument is that with added services like this consumers are likely to be more willing to pay for music and therefore overall sales will increase. Others also state that recommendation services and ad-ons that encourage music purchases are a likely future development for these services which again will increase the amount spent on music.

In the other corner are the record labels who suggest that licenses are required. In the United States it would be hard to argue that these services are not fair use but in countries such as Australia, it has been suggested that the current law allowing format shifting of music is less likely to include a locker service. Personally, I'd be willing to argue that this is fair dealing in Australia and exactly what the legislators had in mind when crafting section 109A of the Copyright Act 1968 (Cth). Especially given that in the definitions section it states that "private and domestic use" means private and domestic use on or off domestic premises.

Music lockers are not a new concept with others already existing and the issues already being litigated in court - see the case against MP3tunes. Its just that Amazon have the negotiation power to force lower royalty rates on the industry in the event that they do negotiate licenses. Others such as Google and Apple also have the market power to launch without licenses and it will be interesting to see in the coming months whether they feel the need to license up front or are willing to let nature take its course. Others without the market share such as Beyond Oblivion seems to have to offer millions to operate a similar service.

For me, like many, the question remains whether my iTunes songs are uploadable and given the DRM restrictions I think I will have to wait until Apple joins in otherwise I might be forced to repurchase a whole heap of songs again - something the labels would love to impose and perhaps even insist upon in the future. This is an issue that I will keep watching and will let you know how things develop.

Further Reading
The Music Network, The Hook: Do cloud-based music services require licensing deals? (11 April 2011) < http://www.themusicnetwork.com/music-features/industry/2011/04/11/the-hook-do-cloud-based-music-services-require-licensing-deals/ > at 12 April 2011

Wikipedia, Michael Robertson (businessman) (11 April 2011) < http://en.wikipedia.org/wiki/MP3tunes#MP3tunes > at 12 April 2011

ArsTechnica, Amazon on Cloud Player: we don't need no stinkin' licenses (29 March 2011) < http://arstechnica.com/media/news/2011/03/amazon-on-cloud-player-we-dont-need-no-stinkin-licenses.ars > at 10 April 2011

ArsTechncia, Music industry will force licenses on Amazon Cloud Player—or else (31 March 2011) < http://arstechnica.com/media/news/2011/03/music-industry-will-force-licenses-on-amazon-cloud-playeror-else.ars > at 10 April 2011

Digital Music News, Sony/ATV to Amazon: "We Are Considering All Options..." (1 April 2011) < http://digitalmusicnews.com/stories/033111sony > at 2 April 2011

TechDirt, Amazon Launches Digital Music Locker, Even As Legality Is Still In Question (29 March 2011) < http://www.techdirt.com/articles/20110329/02085613669/amazon-launches-digital-music-locker-even-as-legality-is-still-question.shtml > at 1 April 2011

TechDirt, New Music Locker Startup Looks More Like Sucker's Bet To Transfer Cash From Investors To Music Labels (15 March 2011) < http://www.techdirt.com/articles/20110311/00445413437/new-music-locker-startup-looks-more-like-suckers-bet-to-transfer-cash-investors-to-music-labels.shtml > at 17 March 2011

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