Wednesday 30 March 2011, 12:31 | By

Amazon locker not licensed – does that matter?

Digital Music Business Top Stories

Amazon MP3

Well, we’ve known for a while that some people are convinced music-based digital locker services don’t require licenses from record labels and music publishers, and it seems that you can add Amazon to that list.

As previously reported, Amazon announced it was launching a music-focused locker service yesterday, enabling users to upload their MP3 collections to a central server and then stream them via a web-based player on various net connected devices (PC, Mac, Android phone).

The concept isn’t especially new, most existing ‘cloud-based’ locker services already enable you to store and access music remotely, and some even already offer user-friendly web-players through which you can choose, stream and playlist your tracks. But Amazon is the first major player to overtly enter the music-locker-with-player market.

The big debate that hangs over this emerging market is whether or not such services need licenses from the content owners whose music will be stored in and played from the cloud. Copyright law is very vague on this issue.

Some argue that, providing a user has legitimately acquired his or her MP3 collection, he or she should be able to store them on a remote server and access them at their convenience without the user or the locker provider needing any copyright license. And while locker providers will charge a fee for their service, they are simply selling disk space and not content, and therefore do not require licences.

Others, mainly in the music industry, argue that – even if you ignore the fact a portion of many music fans’ MP3 collections probably weren’t legitimately acquired in the first place – even the digital music they do properly own is subject to license conditions, and those conditions do not, in the main, allow the making of additional copies of tracks to remote servers and/or the streaming of those tracks over the net (depending on where the track was bought from).

Also, while in many countries (albeit not the UK) copyright law has always allowed users to make back up copies of tracks for private use, oblivious of licensing terms, such a private copy right has traditionally been accompanied by a private copy levy, charged on devices used in the making of such copies and distributed to the music industry via collecting societies. Therefore, they argue, digital locker services are subject to some sort of licensing obligations.

The American industry is waiting for a lawsuit – EMI v MP3tunes – to go to court to try and get some clarity on this issue, EMI saying a license is needed, digital locker service MP3tunes arguing it is not.

For those companies developing their own music-based digital lockers – whether that be Apple, Google, Amazon or any independent player – the question that needs to be asked is: do we try to do licensing deals with the labels which will be costly, or do we wait for EMI v MP3tunes to get to court and see what happens, or do we just launch without licenses and hope MP3tunes win in their legal spat with EMI.

Apple and Google are thought to be opting for the first option, the former by rewriting existing iTunes licence agreements so to allow a digital locker service to launch, but clearly Amazon went for the latter option, enabling them to get to market quickly – licensing talks being a real time consuming hassle, especially when the labels aren’t currently sure whether they should be licensing digital lockers at all.

Asked about all this by Billboard yesterday, Amazon’s music man Craig Pape told Billboard: “We don’t believe we need licences to store the customers’ files. We look at it the same way as if someone bought an external hard drive and copy files on there for backup”.

The labels in the main stayed quiet about Amazon’s big announcement yesterday, though internally many were disappointed that the web giant had decided to go to market without first discussing options with them. Sony Music told Billboard: “We are disappointed that the locker service that Amazon is proposing is unlicensed by Sony Music”.

Whether the labels will now consider legal action against Amazon akin to EMI’s litigation against MP3tunes.com remains to be seen. Certainly with a major player now operating an unlicensed digital locker service, developments in the EMI v MP3tunes squabble will be getting even closer attention from both the content and technology sectors.

Presumably labels are nervous that if digital lockers take off they will hit emerging streaming music platforms like Spotify, and where as unlicensed lockers pay nothing to content owners, labels and publishers earn an albeit tiny royalty every time a song gets played on a streaming service.

That said, there is an argument that there is room in the market for both a la carte and streaming services, which appeal to different types of consumers, and if digital lockers make a la carte services, like AmazonMP3.com, more attractive, then that is in the record companies’ interests. If you buy that argument, you might feel fighting the likes of Amazon over their locker service isn’t a battle worth pursuing, except perhaps to reinvigorate the concept of the private copy levy – where it already exists – and charge that to locker providers.

Either way, this is a debate that has been brewing for years, but which is likely to get more attention now Amazon has entered the market without a music licence.

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