Amazon Beats Apple to Music Streaming

Experts say that Amazon’s new service will herald a wave of similar services from major companies. “It’s about time,” says Aram Sinnreich, an assistant professor of journalism and media studies at Rutgers University and the author of Mashed Up, a new book about digital music. “Cloud music services have been a mythological beast for a decade.”

Sinnreich says many other companies will follow Amazon’s lead. “This is the first mainstream credible effort in this direction,” he says, but he expects Apple and Google to follow suit soon. In fact, both companies are already rumored to be working on their own cloud music services.

Many expected Apple to be the first to offer this type of service—especially after the company bought the music-streaming startup Lala, which already had much of the required technology in place, in December 2009.

But Sinnreich says he’s not surprised to see Amazon come to the market first. He notes that Amazon is already the second-largest seller of digital music, and has both a well-established relationship with record companies and consumers, and a sophisticated billing structure in place.

What may be most significant for users, he says, is that they’re not tied to a particular platform—unlike Apple, which is certain to favor its own iOS, or Google, which could favor Android. (Amazon’s Cloud Player does not yet work on iPhone, but Sinnreich sees no reason that it could not.)

Early reviews have praised Amazon’s price structure and the functionality of the Android Cloud Drive app, but some concerns have been raised. Stephen O’Grady, a founder of the technology analyst firm Redmonk, says that Amazon has work to do to make the service more user-friendly. At the moment, he says, users have to upload files manually; he expects the company will eventually have to offer automatic synchronization.

Sinnreich says he would like to see the service include social functions to help users discover new music. Such functionality is built into Apple’s iTunes through a social networking feature called Ping. Sharing could bring up legal issues with record companies, however, which are notoriously reluctant to let users share music in any way.

Even though Amazon’s service is essentially a locker intended for use by one person, it’s not clear that the company will avoid legal issues and licensing problems. Record companies have been disturbed by services that allow users to download the same piece of music multiple times, and have maintained that streaming requires a separate license distinct from offering tracks for sale. Michael Robertson, founder of mp3tunes.com, a startup that also offers cloud storage for music, says that his company has spent years negotiating and engaging in legal battles. “I’m confident that Amazon’s going to be receiving some calls from record labels today,” he says.

In particular, Robertson says, music companies have resisted licenses that allow retailers to sell music and store it for customers—one of the main features that Cloud Drive offers. That said, Robertson notes that “Amazon must feel confident or they wouldn’t have launched.”

But even if Amazon avoids legal problems, O’Grady says, streaming services like Cloud Player are on a collision course with mobile data pricing, which carriers are beginning to use to restrict how much data people consume. Even as users are learning to stream more than ever before, carriers are instituting data caps, saying they can’t afford to offer unlimited use.

The problem of data on cellular networks is only getting worse, O’Grady says. Other than settings that restrict usage to WiFi networks, which Amazon Cloud Player offers, O’Grady says, “I see no solutions to mobile data costs on the horizon.”