Last week, Apple CEO Steve Jobs announced the fall 2011 release of the company’s new iCloud service. iCloud, a “Web-based locker” where users can store and access content from any Internet-connected device, will offer a seamless integration of content across select Apple products, including iPad, iPhone, iPod touch, and iTunes.
Although iCloud isn’t being pitched as a music service per se, the Recording Industry Association of America (RIAA) has called it “a win for everybody.” Unconfirmed reports indicate that Apple has paid the four major music labels close to $150 million for the cloud service, in lieu of royalties. This all begs the question, what impact might the iCloud service have on the music industry.
A major issue might be file-sharing. Although experts suggest that iCloud could curb piracy, unaddressed issues such as security and streaming could encourage illegal music usage. Through iCloud, users will be able to transfer/upload music in various formats (MP3, AIFF, WAV, MPEG-4, AAC). Users will automatically receive 5GB of free storage space. Purchased music, however, would not count against the free storage space. For any songs that are not already in a user’s iTunes library, iCloud will scan and replace it with a copy already in iTunes. Apple has not addressed whether this feature will replace music that was illegally acquired, possibly encouraging the next generation of illegal file-sharing. Or, whether Apple will develop a strategy to prevent this issue, for example, charging $24.99 a year for the “non-iTunes purchased music storage” option.
In addition to possible piracy issues, music industry analysts might also be concerned with how this service will affect consumer-purchasing habits. Will consumers switch from subscription services to the cloud? What intellectual property rights are at stake? How much will iCloud cost Apple ? For now, these questions remained unanswered.