An iTunes cloud service not imminent, insiders say

The rumored Apple service has yet to obtain the licenses it would need to offer basic features, music industry sources tell CNET.

Greg Sandoval Former Staff writer
Greg Sandoval covers media and digital entertainment for CNET News. Based in New York, Sandoval is a former reporter for The Washington Post and the Los Angeles Times. E-mail Greg, or follow him on Twitter at @sandoCNET.
Greg Sandoval
3 min read

An article about Apple's plan to "soon" launch a cloud service featuring music and movies stirred up a great deal of speculation on Thursday. "Soon," however, is a relative term because Apple has yet to snag licenses from the top four music labels, sources tell CNET.

To stream music, Steve Jobs likely needs licenses, and he doesn't have them yet. James Martin/CNET

The Boy Genius Report's article cited an anonymous source who declared that the Apple service will offer "streaming music and movies from Apple's servers to your computers," will sync iTunes with devices, and will stream content from a home computer to other Web-enabled gadgets.

While some of this has previously been reported in other publications, including CNET, there are still questions about the timing of the launch. Apple representatives did not respond to an interview request.

It is hard to say what Boy Genius Report's source meant by "soon." But it is worth noting that Apple has yet to obtain necessary licenses from the top four recording companies, multiple music industry insiders told CNET. These industry insiders said Apple has indeed engaged in discussions with the music labels but that the record executives haven't even seen all the details yet.

In the viewpoint of some at the major labels, Apple could enable iTunes users to stream songs from a home computer to other gadgets without requiring new negotiation, but for Apple to stream music from its own servers to computers and related devices, Apple CEO Steve Jobs would be required to cut a new deal, the sources told CNET.

Apple has been laying the groundwork for a cloud service since at least December, when it acquired streaming-music service Lala. Since then, Apple has held discussions with executives at the film studios and music labels about moving into the cloud. The obvious benefit of such a service is that by storing films and songs on Apple's servers, the need for local storage would be eliminated.

In the meantime, Google has discussed launching an iTunes challenger with entertainment companies--one that could offer streaming songs, as well as downloads.

To license or not?
A slim chance exists that Apple doesn't agree that it needs the labels' permission to stream music.

Michael Robertson, MP3tunes.com founder

Michael Robertson, a noted tech entrepreneur and founder of MP3tunes.com, is facing music label EMI in court over this very question. MP3tunes.com offers to store copies of users' songs on his company's servers, or the cloud, and then stream the tunes back to them via Web-enabled devices. Robertson, who founded pioneering service MP3.com (which was later acquired by CNET), argues that he doesn't need a license to distribute songs legally acquired by consumers.

In EMI's copyright complaint, filed in 2007, EMI alleges that Robertson's MP3tunes.com and Sideload.com are run-of-the-mill piracy operations. According to EMI, Sideload finds and organizes links to pilfered music files on the Web. MP3tunes then enables those pirated files to be stored, copied, and downloaded to devices without paying a dime to the music creators, EMI charges.

In a 2008 interview, Robertson said EMI's allegations are a ruse. What the label is really after is to prevent him and anyone else from storing music in digital lockers without first paying licensing fees.

A music start-up that launched this week, MSpot, appears to be following Robertson's lead. The service promises to stream users' music from the cloud to their computers or Android devices. CEO Daren Tsui told the Associated Press this week: "We feel that it is the consumer's right to stream music that they already own to their own mobiles."

Well, Tsui had better have a good lawyer because he and mSpot will undoubtedly have to defend that position in court.

And if Apple would decide to go down this path, it too would face a fight because the labels are very much prepared to stand firm on the issue, the music sources said.

So, unless Apple is ready to go to war, don't expect an iTunes cloud service--at least one offering music--anytime soon. Music insiders say that while the whole sector would welcome an iTunes cloud service, negotiating the licenses will likely take months.

Note to readers, 9:14 a.m. PT: Lala's music licenses would not transfer to Apple, the music sources said. U nder theagreement Lala had with the labels, any acquisition of the company required the new owner to renegotiate the licensing agreements. Thanks to reader Joe S. for the question.