Apple inks deal with Sony music for iTunes cloud service; Universal music close to deal

“Apple Inc. has reached agreements with three major record labels to let users of its new music service access their song collections from handheld devices via the Internet, people with knowledge of the deals said,” Andy Fixmer and Adam Satariano report for Bloomberg.

“Apple, the largest U.S. music retailer, follows Google Inc. and Inc. in letting consumers stream music from the so-called cloud instead of downloading it to a hard drive,” Fixmer and Satariano report. “Unlike competing products, Apple’s cloud music service won’t require users to upload online collections, two people said.”

Fixmer and Satariano report, “Apple has reached licensing accords with Sony Corp. (6758)’s music division, EMI Group and Warner Music Group, the people said. Universal Music Group, the largest recording company, is close to a deal, another person said. Whether Apple will charge a fee for the cloud service and when it will become widely available to the public aren’t yet known. The music plans may be part of a broader overhaul of Apple’s MobileMe platform to let users store pictures, contacts and other files on Apple’s servers and access them from the Web, two of the people said.”

“Licenses with the music labels may help Apple make its services more efficient by eliminating the need to store separate copies of a song for each customer,” Fixmer and Satariano report. “Instead, multiple users could stream tracks from the same copy housed on the company’s server… Apple will accommodate the data and networking demands of its planned cloud services with a new $1 billion data center in North Carolina. Chief Financial Officer Peter Oppenheimer said at the company’s annual shareholder meeting in February that the facility will be a hub for the iTunes and MobileMe services.”

Read more in the full article here.

MacDailyNews Take: We love it when a plan comes together! Google and Amazon, not so much.

[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]

Related article:
Apple inks cloud-music deal with EMI; close to agreements with Universal Music, Sony Music – May 19, 2011


  1. Really if you think about it Sony’s that clapped out old horse dragging along its carcass waiting for someone to dismember it for horsemeat & glue. 

    Sony Music isn’t in a position to resist the charms of iCloud much less repel the advance of technology no matter how much Sony likes to keep things proprietary. When it comes down to it survival is the better option to being turned into glue.

  2. Every time Apple has to go to the labels to arm-wrestle them into saving their collective @rses, it is EMI that comes on board first, and Universal that goes along kicking and screaming at the last moment. You’d think that after 8 years of dealing with Apple, they would have figured out which is the hands that feeds them, but no. Uni proudly keeps biting that hand like a rabid dog. Too bad they are so large; Apple could have just given up on them and leave them out of the game.

  3. I look forward to seeing what the benefit is of having my music received via my internet connection rather than having it reside on my hard/flash drive instead. Don’t see how great this is compared to everyone else currently lol! I prefer seeing a 128 GB iPhone/iPad/iPod touch before the cloud currently… Perhaps we’ll still see such an animal even with the cloud becoming a reality?

    1. Bows and flows of angel hair
      And ice cream castles in the air
      And feather canyons everywhere
      I’ve looked at clouds that way

      But now they only block the sun
      They rain and snow on everyone
      So many things I would have done
      But clouds got in my way

      I’ve looked at clouds from both sides now
      From up and down, and still somehow
      It’s cloud illusions I recall
      I really don’t know clouds at all

      – Joni Mitchell

  4. now that Apple is negotiating in good faith, and google and amazon could be considered hostile, in releasing a cloud music service without negotiating with the record labels, how do they go back and negotiate in good faith once they decide to copy the Apple could service? Now there’s no way they can negotiate a better deal than Apple, so they’ll have to either have a higher priced service or cut into their own profits to compete with Apple. If I were a GOOG or AMZN shareholder I would liquidate my shares now, because they don’t have a real plan or the discipline to compete with AAPL, and they’re taking their eye off the ball of their core business to do it.

  5. For Apple, there are likely going to be little or no profits on the iCloud. As we all know, Apple is a hardware company (remember the massive margins on those?), so whatever they do outside of the hardware business is there to make their hardware offerings more complete and appealing. Same for iLife, same for iTunes Store, same for, and all other services that they offer at little to no cost, operating them at or very close to break-even point.

    In order for Google to eventually offer the same service at same price points as Apple (or lower), they will have to massively leverage their ad revenue within that service (which might work; vast majority of consumers are used to ads, and are oblivious to the levels of privacy intrusion by Google). I just can’t see how Amazon can compete here, when they don’t have any other business line to prop this up with.

  6. This much reliance on the cloud makes Apple’s services dependent on the quality of a third party internet connection and the price structure is also out of Apple’s control.

    It’s looking to me that the time is now right for Apple to offer a global internet service via a virtual network. They could then offer a reliable and user-friendly service without screwing additional fees out of customers for ‘extras’, which ought to be part of the basic bundle.

    If they did it globally, they could also eliminate data roaming charges, which are obscenely expensive.

    Apple now have the consumer devices, the services, the retail stores and the on-line ordering infrastructure to make all this happen very smoothly. It would also pull the rug from under all the mobile telecom providers, who have enjoyed a licence to print money which has been similar to that formerly enjoyed by the music labels.

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