Technology titans are racing to deliver music and other digital files from online storehouses, with Amazon.com Inc. grabbing the inside track over rivals such as Apple Inc. and Google Inc.
The competition comes amid a shift in the way digital songs, videos and other media are being purchased and played. For years, the marketplace has been dominated by Apple's iTunes store and a business model based around downloaded files.
But the proliferation of mobile gadgets—and fears of losing access to family photos, music or other valuable files on broken or lost devices—is expected to drive consumer interest in remote storage lockers for digital files that can be accessed anywhere.
Amazon has already developed a significant sideline that rents computing resources and data-storage capacity to companies over the Internet—or in the cloud, in industry jargon.
Amazon is starting an online service that lets people store digital music. But this cloud service is in a gray area until Amazon negotiates licenses with music publishers. Plus: can it compete with iTunes? Peter Kafka discusses with Ethan Smith and Stu Woo.
With its launch Tuesday of a service called Amazon Cloud Drive, the company is angling to build a comparable beachhead in the battle over consumers. Both Google and Apple have been developing similar Web-based offerings.
Amazon's service lets people store up to five gigabytes of music, photos, videos and documents on server systems operated by the company. The basic storage is free; additional space can be purchased for a yearly fee.
The approach is designed to let consumers play music they have purchased or access other data files from multiple computers—such as at the home or office—as well as smartphones and tablets running Google's Android software. Amazon's service doesn't work with Apple's iPhone.
"Five years from now, people will think of online services like Cloud Drive as the primary place for safe keeping of critical information, as opposed to a backup, which is how they think about it today," said Frank Gillett, an analyst at Forrester Research. "It is a big deal for Amazon to get into this."
While Amazon has built a sizeable business in selling MP3 music downloads, its sales remain far behind those of Apple—whose hit iPods, iPhones and iPads can sync files directly with iTunes, unlike competing hardware.
Apple's MobileMe service already lets users store and sync their email, calendar and contacts in a central location for $99 a year.
Other Clouds
* Flickr: Yahoo's service for uploading and sharing photos. Cost: Free with upload limits
* Mozy: EMC service to store music, photos and emails. Cost: Starts at $5.99 a month
* Dropbox: Store and sync files. Cost: 2GB of free storage; $9.99 a month for 50GB
* Google Docs: Create, upload and share documents, spreadsheets. Cost: Free for up to 1GB in uploaded files
* MobileMe: Apple's service to sync email, calendars and contacts. Cost: $99 a year
* Windows Live SkyDrive: Microsoft service to upload and share files. Cost: Free for up to 25GB of storage
* Unifi: RealNetworks's service to catalog and stream media to multiple devices. Cost: TBD
—Source: WSJ reporting
The Silicon Valley company also is working on a revamp of the service that would also expand to multimedia files such as music and videos, people familiar with the matter have said.
An Apple spokesman declined to comment.
"Apple certainly needs to push its own locker service on the market," said Aapo Markkanen, an analyst at ABI Research.
"It's a big advantage to Amazon's music store if you compare that to iTunes. It could cause a lot of iTunes customers to swap to Amazon," he said.
Google, by contrast, has been a major backer of online software, including email and word-processing programs Gmail and Google Docs.
Last fall, the company launched Google eBooks, which lets users buy digital books and access them from Internet-connected devices.
The company is negotiating similar deals with music labels, and it has pitched to news publishers a project to sell content through mobile devices, people familiar with the matter have said.
Google didn't respond to requests for comment.
The philosophy underlying such efforts is not new. Some well-known music services have offered alternatives to buying song downloads, including Rhapsody International Inc.—which offers subscription downloads and streaming music—and the Internet radio service Pandora Media Inc.
Such services can be tough to create, though, because of concerns among record labels and music publishers about how copyrighted material is handled.
For example, Spotify AB, a European online-music streaming service, has repeatedly set target dates for a U.S. launch, only to miss dates after failing to secure music rights.
Among the issues for Amazon, industry executives and analysts say, is whether consumer should be allowed to store music they may have downloaded illegally in addition to adding new songs they purchase legally.
A number of other companies have set up online storage services of various kinds that have so far not had public disputes with copyright holders.
Examples include Amazon's Web services, EMC Corp.'s Mozy service, Microsoft Corp.'s Windows Live SkyDrive, Dropbox Inc. and a new service from RealNetworks Inc. called Unifi.
For its new consumer offering, Amazon argued Tuesday it doesn't need to negotiate new licenses from the music industry because its Cloud Drive is akin to a user storing files on an external hard drive.
The company hopes to profit from the new services by encouraging users to buy from its online-music store, which is integrated with the Cloud Player companion software that catalogs and plays songs.
It also offers paid storage plans for people who want more than five gigabytes of storage, which Amazon says holds up to 1,000 songs.
For example, it will charge $20 a year for 20 gigabytes of storage. One current offer: users get upgraded to 20 gigabytes of storage if they buy a music album off Amazon.
Users can save music files in the MP3 format that Amazon and others sell as well as the AAC format, which is the standard for Apple's iTunes service. New music purchased from Amazon and saved directly into the Cloud Drive wouldn't count against the storage limit.
While Amazon's service will work with Android smartphones or tablets, it doesn't work with Apple devices like the iPhone or iPad or Amazon's Kindle e-book reader.
The new storage service is part of a bigger mobile push by Amazon, which opened an online store to sell software applications for devices running Google's Android software, putting it in direct competition with Google's own existing app store and Apple's App Store for its devices.
Mr. Markkanen, the ABI Research analyst, said Amazon's model may appeal to audiophiles with large music libraries.
He said other users may prefer online-radio models, such as Pandora, or subscription music services that offer users access to a large library, such as Rhapsody or Spotify.
"They are simply more convenient and offer better value for money than models that are still based on purchasing songs and albums one by one, even if you store those purchases in the cloud," he said.
The competition comes amid a shift in the way digital songs, videos and other media are being purchased and played. For years, the marketplace has been dominated by Apple's iTunes store and a business model based around downloaded files.
But the proliferation of mobile gadgets—and fears of losing access to family photos, music or other valuable files on broken or lost devices—is expected to drive consumer interest in remote storage lockers for digital files that can be accessed anywhere.
Amazon has already developed a significant sideline that rents computing resources and data-storage capacity to companies over the Internet—or in the cloud, in industry jargon.
Amazon is starting an online service that lets people store digital music. But this cloud service is in a gray area until Amazon negotiates licenses with music publishers. Plus: can it compete with iTunes? Peter Kafka discusses with Ethan Smith and Stu Woo.
With its launch Tuesday of a service called Amazon Cloud Drive, the company is angling to build a comparable beachhead in the battle over consumers. Both Google and Apple have been developing similar Web-based offerings.
Amazon's service lets people store up to five gigabytes of music, photos, videos and documents on server systems operated by the company. The basic storage is free; additional space can be purchased for a yearly fee.
The approach is designed to let consumers play music they have purchased or access other data files from multiple computers—such as at the home or office—as well as smartphones and tablets running Google's Android software. Amazon's service doesn't work with Apple's iPhone.
"Five years from now, people will think of online services like Cloud Drive as the primary place for safe keeping of critical information, as opposed to a backup, which is how they think about it today," said Frank Gillett, an analyst at Forrester Research. "It is a big deal for Amazon to get into this."
While Amazon has built a sizeable business in selling MP3 music downloads, its sales remain far behind those of Apple—whose hit iPods, iPhones and iPads can sync files directly with iTunes, unlike competing hardware.
Apple's MobileMe service already lets users store and sync their email, calendar and contacts in a central location for $99 a year.
Other Clouds
* Flickr: Yahoo's service for uploading and sharing photos. Cost: Free with upload limits
* Mozy: EMC service to store music, photos and emails. Cost: Starts at $5.99 a month
* Dropbox: Store and sync files. Cost: 2GB of free storage; $9.99 a month for 50GB
* Google Docs: Create, upload and share documents, spreadsheets. Cost: Free for up to 1GB in uploaded files
* MobileMe: Apple's service to sync email, calendars and contacts. Cost: $99 a year
* Windows Live SkyDrive: Microsoft service to upload and share files. Cost: Free for up to 25GB of storage
* Unifi: RealNetworks's service to catalog and stream media to multiple devices. Cost: TBD
—Source: WSJ reporting
The Silicon Valley company also is working on a revamp of the service that would also expand to multimedia files such as music and videos, people familiar with the matter have said.
An Apple spokesman declined to comment.
"Apple certainly needs to push its own locker service on the market," said Aapo Markkanen, an analyst at ABI Research.
"It's a big advantage to Amazon's music store if you compare that to iTunes. It could cause a lot of iTunes customers to swap to Amazon," he said.
Google, by contrast, has been a major backer of online software, including email and word-processing programs Gmail and Google Docs.
Last fall, the company launched Google eBooks, which lets users buy digital books and access them from Internet-connected devices.
The company is negotiating similar deals with music labels, and it has pitched to news publishers a project to sell content through mobile devices, people familiar with the matter have said.
Google didn't respond to requests for comment.
The philosophy underlying such efforts is not new. Some well-known music services have offered alternatives to buying song downloads, including Rhapsody International Inc.—which offers subscription downloads and streaming music—and the Internet radio service Pandora Media Inc.
Such services can be tough to create, though, because of concerns among record labels and music publishers about how copyrighted material is handled.
For example, Spotify AB, a European online-music streaming service, has repeatedly set target dates for a U.S. launch, only to miss dates after failing to secure music rights.
Among the issues for Amazon, industry executives and analysts say, is whether consumer should be allowed to store music they may have downloaded illegally in addition to adding new songs they purchase legally.
A number of other companies have set up online storage services of various kinds that have so far not had public disputes with copyright holders.
Examples include Amazon's Web services, EMC Corp.'s Mozy service, Microsoft Corp.'s Windows Live SkyDrive, Dropbox Inc. and a new service from RealNetworks Inc. called Unifi.
For its new consumer offering, Amazon argued Tuesday it doesn't need to negotiate new licenses from the music industry because its Cloud Drive is akin to a user storing files on an external hard drive.
The company hopes to profit from the new services by encouraging users to buy from its online-music store, which is integrated with the Cloud Player companion software that catalogs and plays songs.
It also offers paid storage plans for people who want more than five gigabytes of storage, which Amazon says holds up to 1,000 songs.
For example, it will charge $20 a year for 20 gigabytes of storage. One current offer: users get upgraded to 20 gigabytes of storage if they buy a music album off Amazon.
Users can save music files in the MP3 format that Amazon and others sell as well as the AAC format, which is the standard for Apple's iTunes service. New music purchased from Amazon and saved directly into the Cloud Drive wouldn't count against the storage limit.
While Amazon's service will work with Android smartphones or tablets, it doesn't work with Apple devices like the iPhone or iPad or Amazon's Kindle e-book reader.
The new storage service is part of a bigger mobile push by Amazon, which opened an online store to sell software applications for devices running Google's Android software, putting it in direct competition with Google's own existing app store and Apple's App Store for its devices.
Mr. Markkanen, the ABI Research analyst, said Amazon's model may appeal to audiophiles with large music libraries.
He said other users may prefer online-radio models, such as Pandora, or subscription music services that offer users access to a large library, such as Rhapsody or Spotify.
"They are simply more convenient and offer better value for money than models that are still based on purchasing songs and albums one by one, even if you store those purchases in the cloud," he said.
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