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Report: Google bid $100M for cloud music rights

According to a BusinessWeek report, the record labels are using cloud rights to push Google to do more to protect their content online. But sources tell CNET that other issues were involved.

Google threw large sums of money at the four major record labels during negotiations for cloud-music rights, according to a published report.

Google Chairman Eric Schmidt greets Doug Morris, former Universal Music Group CEO in 2009. Greg Sandoval/CNET

BusinessWeek magazine is reporting that Google offered the labels $100 million to obtain licenses for a cloud music service. After negotiating for more than a year, talks broke down. Google launched an unlicensed service two weeks ago that enables users to upload their songs to the company's servers but isn't as fully equipped as it might be with licenses.

This is the latest and perhaps most dramatic sign of how important antipiracy efforts are to the labels. BusinessWeek reported that they turned down the money because they want Google to turn up the heat on the online pirating of music and other copyrighted works. A source with knowledge of the negotiations between Google and the labels told CNET that other issues were involved in the breakdown of negotiations, such as Google's reluctance to detail what its plans are for the cloud service. Another source close to the talks disputed that the impasse was over antipiracy and said discussions broke down because of business-related issues.

Related links
• Senate panel OKs controversial antipiracy bill
• Little divides Apple, music publishers on cloud deal
• Does Eric Schmidt speak for Google on copyright?

Why would anyone suggest that the labels would pass up big dollars for antipiracy considerations? Whether it's true or not, the large entertainment companies are trying to pressure Google to make changes. As the top Internet search engine, it is believed to be in a position to make it more to difficult to find pirated materials online. The company's ads are often found on sites accused of trafficking in pirated or counterfeited materials.

Google has already agreed to a series of changes, and those include booting alleged copyright violators off AdSense, and blocking terms associated with piracy from appearing in the search engine's Autocomplete function.

Cloud music is the term used to describe songs that are hosted on someone else's servers, accessible to users from a variety of devices rather than locked into a specific gadget. Amazon and Google are among the companies that have begun offering consumers a chance to load their music libraries onto the companies' servers. Apple is expected to soon join the fray.

The cloud is supposed to be the next music distribution format.

Google has a long of history of clashing with content creators, such as newspapers movie studios and book publishers over copyright issues, but the company said it is opposed to intellectual-property infringement. Big entertainment companies and other copyright owners are serious about trying to get Google into the antipiracy battle on their side. They have lobbied Congress for tougher new laws as well as to take Google to task for some of the company's practices.

The Senate Judiciary Committee yesterday voted 19-0 in favor of the Protect IP Act, a bill that would give authorities sweeping powers that include cutting off Web access in this country to accused pirate sites based overseas. Lawmakers from both major political parties and in both houses of Congress have called on Google to do more policing of its search engine.

On the other side, Google has itself been critical of some of the antipiracy efforts. Google Chairman Eric Schmidt last week warned that cutting off sites from the Web could enable governments to restrict free speech. Schmidt's comments, coupled with the company's launch of an unlicensed music service, has some on the copyright side wondering if Google is friend or foe.