Thursday, March 31, 2011

Amazon Cloud Player: What has Changed Since UMG v. MP3.com?

Amazon didn't beat Apple to market because of technology.  They beat Apple to market by going without licensing.

Amazon has announced its Cloud Player and Cloud Drive, which allow users to upload music for later streaming back from Amazon to various devices.  There has long been speculation that Apple is working on a similiar "cloud" component for the iTunes ecosystem.  Rumors intensified when Apple acquired Lala.

It is doubtful that Apple's delayed entrance into this market is related to technical issues.  Apple delivers high volumes of digital content through the iTunes Store, the App Store, and most relevantly, through streaming of movie rentals.  I've always presumed that Apple has been reluctant to offer such a service without explicit licensing agreements with the major music companies.

In the late 1990s, MP3.com provided an online streaming service called my.mp3.com.  Users would insert a CD into a CD-ROM drive, MP3.com software would identify the disk, and the user would be provided with streaming access to online MP3 versions of those songs via the web.

MP3.com was promptly sued.  MP3.com argued fair use, but quickly faced a partial summary judgement:

The complex marvels of cyberspatial communication may create difficult legal issues; but not in this case. Defendant's infringement of plaintiff's copyrights is clear. Accordingly, on April 28, 2000, the Court granted defendant's motion for partial summary judgment holding defendant liable for copyright infringement.  (UMG RECORDINGS, INC. v. MP3.COM, INC., SDNY, May 4, 2000, U.S. Dist. LEXIS 5761)

Amazon reportedly has not obtained licenses to stream users' content, but is working on obtaining them.  From the WSJ:

Tuesday, a spokeswoman for Sony Corp.'s Sony Music Entertainment said the company was "disappointed" with the way the online retailer launched the new service, known as Amazon Cloud. "We are keeping our legal options open," the spokeswoman added.

Perhaps the legal landscape has changed since UMG v. MP3.com, but I wouldn't get too attached to Cloud Drive quite yet.

 

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