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Expect Apple to charge for music cloud

Apple could offer a cloud music service for free initially, but consumers are eventually going to have to pay for access, sources said.

Don't expect Apple's cloud-music service to come free of charge, at least not forever.

Apple plans to eventually charge for its cloud music service, sources told CNET. Users would be able to store their digital media on the company's servers. Greg Sandoval/CNET

Music industry insiders told me that Apple has indicated it could offer the service free of charge initially but that company will eventually require a fee. Google is also expected to charge for a similar service.

Billboard writer Ed Christman reported last September that Google was considering a plan to charge $25 a year for a subscription for its cloud service. Last month, the blog Wayne's World reported that Apple would charge $20 annually, but nobody I spoke with seems to know for sure what Apple may ask. An Apple spokesman did not respond to an interview request.

Both Apple and Google began discussing plans more than a year ago with the largest four recording companies about enabling users to upload their songs to the companies' servers. Music could then be streamed to users' songs via Internet-connected devices. This kind of third-party computing is known as the cloud.

It's going to be interesting to see how online music stores make their cloud-music offerings sweet enough to get consumers to pay--especially the early adopters (and if you're reading CNET that means you). Subscription services have yet to attract any significant market share in digital music. It's generally accepted that consumers prefer to own their tunes rather than renting them and there are some who suspect that the cloud is a way for the Web stores and the labels to charge consumers to access songs they already own.

What the music industry is banking on is that consumers will see the sense in paying a relatively small monthly fee for access an endless supply of songs. Right now, to obtain music legally, people have to pay $1 or more for each song. Decision makers in the industry hope people will conclude that ownership doesn't provide the best bang for the buck, just as they have concluded with movies.

DVD sales have fallen the past couple of years just as consumers have begun flocking to Netflix, a subscription service that charges $8 a month for all-you-can-eat viewing of films and TV shows.

Meanwhile, Apple and Google continue to seek licenses for their services. So far, Apple has a deal with Warner Music Group, But Google's negotiations with the four top labels have stalled. Amazon got off the ground with a cloud music service last month and charges based on the amount of data a user stores.

Update 11:00 a.m. PT: Billboard reporter Glenn Peoples has posted an interesting opinion piece today about why the music sector should adopt Netflix's business model. You can read it here.