Amazon’s Cloud

Cloud computing, cloud syncing, cloud services, cloud storage.  It seems like anything these days with that ambiguous (and overused) word is sexy.  And the Cloud got a huge jolt of tangibility from Amazon’s launch of Cloud Drive and Cloud Player this past week.  But, the content industry is not too thrilled; more on implications in a bit.

Suffice it to say that the Amazon Cloud Drive and Player are consumer-oriented services that allow users to back up their local music libraries and play them remotely from anywhere via the Web or an Android device.   For you and me, that means if our tablet, laptop or smart phone crashes, our music would be left untouched and ready to be accessed on another device.  We can expect that Apple and Google will follow shortly with their own cloud offerings, but Amazon wins the First to Market Contest. For a decent read, check out the New York Times for an overview.

In terms of the experience, user reviews are also beginning to land (here’s a good one, there’s a decent one).  The most consistent positive callout is about the interface and ease of use.  On the negative side is the fact that uploading your entire music collection takes a ton of time and is generally a pain in the derriere.  Costs seem reasonable enough (free 5GB and $1 per GB thereafter).

OK enough facts.  Let’s now riff on the impacts of Amazon Cloud services on the music and movies businesses.

The labels are annoyed

Record labels are pretty well pissed off at Amazon for going to market without really consulting them and seeking out the appropriate licenses to stream music from the cloud to your devices.  Labels are concerned because they feel that some music in your collection isn’t “legit:” some music is either stolen from file sharing sites or ripped from friends’ CDs.  Besides offering a service that cuts revenue from labels on inappropriately obtained music, labels are worried that Amazon Cloud services will encourage friends to rip – and share – their music collections.

As Copyright and Technology points out, Amazon’s likely attitude toward the labels is “So sue me.” Simultaneously Amazon will argue that the labels owe them a favor for offering a competitive service to iTunes.  All I can say is that lawyers are licking their chops on the ensuing litigation that will undoubtedly occur.

And how about the studios?

While Amazon Cloud services are limited to our music collections for use across our non-Apple devices, Amazon will likely allow you to put your movie and television shows in the Cloud in the not so distant future.  Studios will undoubtedly resist Amazon Cloud services without the appropriate protections in place to make sure we nasty customers don’t steal and share with our friends.  I think we should expect some interesting (and litigious) discussions to come.

What about current industry efforts with the Cloud?

In an interesting twist, Ultraviolet, which has studio backing from all but Disney, is now faced with a few interesting scenarios to consider as the Cloud space materializes.  On the positive side, with Amazon’s launch into the Cloud, Amazon is educating consumers to what life looks like with “up there.”  So an optimist could argue that Ultraviolet will benefit from drafting Amazon’s efforts.  Another outcome for Ultraviolet is if Amazon joins the consortium and then potentially leverages Amazon’s considerable Cloud infrastructure. Good for Ultraviolet, but bad for the only member company that has skin in the game.  Neustar will need to figure out how to avoid being squeezed out by Amazon.

Another scenario includes Ultraviolet being a potential competitor to Amazon’s Cloud.  If the studios get a sudden change of heart to license content to Amazon, Ultraviolet may just evaporate.

Wrap up

The Cloud is heating up, for sure.  Google and Apple will launch something, and soon the Cloud will become a must have feature in any content service.  But the content industry will not go quietly into this Cloud-based world.  And like the legions of lawyers out there, I’m grateful for the job security and the articles to come.

What do you think?  What are scenarios with labels, studios, industry consortia?

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Comments on: "Amazon’s Cloud" (2)

  1. Here’s a prediction: Amazon will join UltraViolet contemporaneously with Hell reaching 32 degrees Fahrenheit.

    UltraViolet’s weak point as an industry value proposition is with retailers — specifically the part about requiring retailers to make users’ rights lockers portable, just as SIM cards are for GSM mobile telephony. This is understandable given the movie studios’ interest in avoiding the fate of the music industry, which gave a single retailer (Apple) too much control over the value chain. But it is antithetical to the consumer lock-in that Amazon thrives on. It’s notable that the only major US retailer that has joined UltraViolet is Best Buy — and Best Buy is merely hedging its bets against its own efforts with Sonic Solutions/CinemaNow.

    Like

    • Your prediction couldn’t be clearer, and in my opinion, spot on. What benefit would Amazon have at this stage of joining UV, which has been lumbering on for the past two years? Amazon is big enough through its physical sales and burgeoning digital sales that it has significant sway with the studios. In other words, they’ve got a nice fat juicy carrot that will convince the studios to do what is in Amazon’s interest. That carrot might just be used to lure the studios away from UV and into the loving arms of Amazon. In which case, UV goes poof.

      Regarding your point on retailers – it is interesting that Best Buy is the only retailer there. Where’s Wal-Mart? Target? Anyone else? They haven’t joined – to be totally honest – because not only do they get a bit squeamish about sharing customers, but they also are not too fond of the idea of bearing the brunt of the costs of operating the ecosystem.

      Thanks so much for your comments. You got me all fired up.

      Like

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