Amazon stirs the locker-licensing debate

Amazon has rolled out a new service in the US that allows users to store music in a digital locker that can be accessed from any PC or Android-powered mobile device. The latest issue of Music & Copyright takes a look at why the launch has prompted a significant amount of debate over its legality. Amazon claims it needs no license for simple remote storage.

Amazon joins a number of locker services that have already launched and which offer a variety of enhancements on simple remote access. Unless you have actively been looking for a digital locker service, the chances are you won’t have heard of most of the services included in the below table. However, MP3tunes is one you probably will have heard of. It was first launched by the US digital-music pioneer Michael Robertson at the end of 2005. EMI filed a copyright lawsuit in 2007 against MP3tunes and Robertson claiming that the outfit was encouraging people to pirate music via another Robertson vehicle, Sideload.com, and then stockpile those illicit tracks in the locker.

Since the launch of Amazon Cloud Drive, a number of questions have been raised about the legality of the service, with some comparing it to MP3tunes. But Cloud Drive is nowhere near as sophisticated as MP3tunes, or most of the other remote-storage music services available, for that matter. Cloud Drive offers storage only, and the uploading of music, and other file types, is a manual process. The only nonmanual part comes when a user buys a track from Amazon’s MP3 retail store. Any new MP3 purchases can be automatically added to Cloud Drive at the point of sale.

Amazon’s high profile and the widespread media coverage of its launch of Cloud Drive is the main reason there is so much speculation over whether it needs a license to operate its basic locker service. The other remote-access services have come in for little criticism – aside from mSpot, whose CEO, Daren Tsui, was taken to task by Harry Maloney, CEO of Catch Media, on a cloud-music panel at the MIDEM music conference held earlier this year. Maloney complained that mSpot should not be able to operate without licenses from the music companies. Tsui was also criticized on the same panel by Thomas Hesse, SME’s president of Global Digital Business, US sales and corporate strategy. He said that SME was uncomfortable about any service that allows users to just “throw anything into the cloud and stream it, if what you threw into the cloud was not legitimately purchased.”

Amazon maintains that it does not need a license for simple remote-access storage. Whether this is the case is open to conjecture, and until a case is heard in court or all the record companies publically accept the existence of these services, the debate is likely to continue. However, with locker services operating in countries that have in place a private-copying-remuneration system, there seems little doubt that some sort of fee that remunerates rights holders should apply. Although some countries limit the addition of private-copying fees to recordable media, such as CD-Rs, others apply fees to external hard-drive recorders, MP3 players and memory cards. Amazon has already said that its locker system is similar to consumers using an external hard drive to back up their music collections, and therefore the addition of a fee, in some countries, seems reasonable.

Most commentators agree that the launch of Cloud Drive was intended to get a jump on anticipated cloud-service launches from Apple and Google. Certainly, if a user has taken the time to upload his personal music collection to a digital locker, he might be reluctant to do so twice. Subsequent enhancements to the service would then give users more reason to stay, and if they regularly download music from iTunes, they might be more likely to switch to Amazon MP3. Although an unlicensed service might not be in the music companies’ best interests, if it were to result in a reduction of iTunes’ download market share, it might be a price worth paying.

Music & Copyright is a fortnightly research service published by Informa Telecoms & Media.

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