This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.
Business News Digital Labels & Publishers Top Stories
All four majors on board for iCloud, publishing and indies still to be sorted out
By CMU Editorial | Published on Wednesday 1 June 2011
A deal has been done with Universal Music for Apple’s new storage service iCloud, according to the Wall Street Journal, with contracts due to be inked this week.
This means that all four major record companies will be on board when Apple formally launches the new service at the Worldwide Developers Conference in San Francisco next week – the IT giant having confirmed yesterday that it will use that event to unveil its the new music offer, and that that offer is called iCloud. Speculation is now rife that Steve Jobs will lead the launch proceedings.
Apple, of course, will be the first company to launch a music storage service that is endorsed by the major record companies – the digital lockers offered by Google, Amazon and smaller players in the market currently operating without content licences (legally or illegally so, depending on who you ask). It remains to be seen what limitations Apple has had to apply to its locker service in order to get the labels on board, it seeming unlikely Apple will have gone the ‘pay big bucks now and sort out the details later’ route that some start-ups have to go through to make the labels embrace new business models.
We know that some in the big record companies remain cautious about the very concept of digital lockers, which they feel potentially compete with subscription-based streaming services like Spotify without delivering anywhere near the same level of revenue for content owners. Others fear that lockers offer too much functionality to those who built up their MP3 collections illegally, and potentially open the doors for even more unlicensed sharing of music.
However, according to Billboard, it wasn’t just the concept of digital lockers that hindered talks between Google and the record industry on the issue. Unlike Amazon, Google did try to get the majors on board for its slightly unwieldy digital locker. Billboard’s sources say that few at the majors were still resisting the very concept of digital lockers when in talks with Google, rather there were other issues, including how revenues generated by a music storage service would be shared between different stakeholders.
Though, if Billboard is to be believed, execs at the Sony and Universal record companies didn’t have a problem with Google keeping 30% of revenue, but with the music publishers getting over a sixth of the content owners’ share – Google’s proposal, it’s reported, was the revenue be split 12% publisher, 58% label, it keeping the rest.
Given that both Sony and Universal own publishing companies as well as record labels it would seem insane that such a grievance could topple the whole Google locker deal, though it’s not the first time squabbling between record and publishing companies owned by the same people have hindered digital growth.
The very same issue still has the potential to hinder iCloud, though because Apple did its deal with the labels first, whereas Google seemingly had the publishers sorted before the record companies, it probably won’t scupper Steve Jobs’ plan to launch his new service next week. Wrangling between Apple and the music publishing sector reportedly continues.
Of course, none of this makes reference to the independent sector, which, as far as we know, is not currently signed up to iCloud. Google reportedly offered the indies a less good deal than the majors on its digital locker, and it wouldn’t be a surprise if Apple was doing likewise, though hopefully indie rights agency Merlin will hold fast and embarrass the supposedly independent thinking IT firm into more favourable terms, even if it means holding out at launch.
