There has never been a doubt about Apple’s intention to bring iTunes to the cloud. The company has been planning that for quite some time. Many experts assumed it had lost its opportunity to gain a huge advantage in this business by offering cloud-based iTunes first. Apple was upstaged by Amazon and Google. But unlike them, it is succeeding in bringing major music labels on-board.
As Google’s Jamie Rosenberg explained, the company had no choice to move forward as it couldn’t get music labels to curb their expectations:
Unfortunately, a couple of the major labels were less focused on the innovative vision that we put forward, and more interested in an unreasonable and unsustainable set of business terms.
When Amazon and Google announced their cloud music services early, they opened the door for Apple to move in and work on striking deals with music labels. According to multiple sources, Apple has already struck a cloud-music agreement with EMI Music. CNET reports that Universal Music Group and Sony Music Entertainment are close to agreeing with deals with Apple.
With Warner Music Group already on-board, Apple will have 4 major music labels on its side when it takes iTunes to the cloud. What will set Apple’s product different from others? These agreements will allow iTunes to have features not available in other comparable music services. Not surprisingly, these music labels want Apple to succeed so they can get the other two companies to make a deal with them.
Google’s Eric Schmidt did explain the reason Google failed to come to terms with some of these labels:
This is an important issue. I’ve spent months personally talking to the music industry – as have others in the company – and we were unable to come to a proper deal. It’s not like we didn’t try…In order for us to do the next part of the product – where we want to be able to sell music to these customers which we think is extremely lucrative – we need the permission and a deal with the music industry. Obviously, the disagreement is over money.
The more success Apple achieves with its cloud-based music service, the more pressure Amazon and Google will have to make a deal.
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