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Exclusive: Apple near cloud-music deals

Apple already had a deal to offer cloud music from Warner Music and is said to have agreement in place with EMI, music industry sources tell CNET. Sony Music and Universal Music are also close.

Apple has signed a cloud-music licensing agreement with EMI Music and is very near to completing deals with Universal Music Group and Sony Music Entertainment, multiple music industry sources told CNET.

Greg Sandoval/CNET

Warner Music Group already had a deal in place with Apple, CNET reported last month. The licensing agreements will enable Apple to launch a fully licensed cloud-music service to rival unlicensed offerings of rivals Amazon and Google.

The negotiations with Sony Music Group and Universal Music Group could be wrapped up as early as next week, the sources said. What this means is that signed contracts with all four of the top four record companies will be in Apple's hip pocket on June 6 when Apple kicks off the company's Worldwide Developers Conference. The sources who spoke with CNET did not know when Apple would announce the deals or roll out the cloud service.

Representatives from the labels as well as Apple declined to comment.

The cloud is the term used to describe when a person uses a third-party's servers for computing instead of a local PC. One of the core features of a cloud music service is enabling consumers to store their songs on a company's servers. They can then access their libraries from Web-connected devices.

Apple will finish behind Google and Amazon in the race to the cloud, but Apple now has the freedom to offer a range of features that rivals are prevented from rolling out because of the licensing restrictions, the sources said.

One example is that instead of requiring users to spend hours uploading their songs to the company's servers, as Google and Amazon do, Apple could just scan a user's hard drives to see what songs they own and then provide them almost-instant streaming access to master recordings. The process is sometimes referred to as "scan and match." The music service Lala, which Apple acquired in December 2009, made this process famous.

There's no doubt who the top-four record companies are pulling for in the cloud music wars. They hope Apple's service makes the other two guys look shabby by comparison. The thinking is that if Apple's service eclipses those of its rivals, it will prompt Amazon and Google to pay the labels' licensing rates.

What nobody has proven yet is whether consumers even want the cloud. CNET has reported that Apple is likely to charge a subscription fee eventually for its cloud service. Subscription music services, such as Rhapsody, have a spotty record at attracting audiences.

The main criticism is that once a user stops paying fees, the music disappears. But the services and the labels are hoping that consumers will find value in the ability to access their tracks from anywhere, anytime, and with any device that will connect to the Web.