With the announcement of Amazon’s new Cloud Player iPhone app, the Universal Music Catalog is one step closer. For years I have dreamed of this Star Trek-like device, where I can find any song I want and listen to it, from anywhere. Preferably this will be an app on a device I already own (smartphone), rather than a new iPod or something.
You may be skeptical but let’s work through this.
First, all three major online music retailers, Apple/Amazon/Google, give you the ability to upload thousands of songs to their cloud for free or at nominal costs. Which means that each of them has the most massive music catalog you can possibly imagine. They also highly promote the “matching” ability of these mega-drives, which means that they probably already have the song you’re uploading so don’t worry, you can just use their copy.
But, if they don’t have your song then they will store a copy on their drive, a brilliant way to continue growing their catalog.
Second, the details here are awesome. Amazon just announced that if you pay $20/year you have unlimited storage space for music. Google offers space for 20,000 songs for free and Apple is charging $25/year for storage of 25,000 songs. This even includes those mixtapes you’ve been carrying around, rare CD’s, and even live recordings.
Yeah, the piracy debate is dead in the water here. Theoretically, one person could pirate 20,000 songs and then upload them to Google for free, with forever storage.
Third, and final, the music industry isn’t making money from these deals. The nominal yearly charges of $20-25 are chump change. I’m sure people are buying a lot of this music at first, but once they get it into the Cloud, no more money for the studios. They will need to find a way to make some money off these existing songs or else face the Ultimate Cloud Libraries that everyone is starting to build.
One way, is to follow the Spotify model. This first-round attempt at the Universal Music Catalog is pretty darn good. On my laptop I can find nearly any song/album/band and listen to it with some interlaced ads. If I want to go mobile then that’s $10/month.
There are two problems with this model. One, far too many people consider ads not enough money, but that is thinking small. Imagine the day when the Universal Music Catalog is the dominant device on commutes, during workouts, in homes, etc. We are talking about billions of hours listened to every day. What is $1 revenue per hour…a billion dollars/day (though I think one hour of advertising is worth more like $1,000+ with targeted ads).
Second, a company like Spotify will never be able to match the breadth of the catalogues that Apple/Amazon/Google are building. For example, Spotify advertises on their site that they have “millions of songs”, while Amazon is talking about “20 million songs”.
They just can’t compete with that and will be need to partner with one of the big three, get bought, or be pushed out of business. They are first-in-the-door with the advantage, but that may not hold in the race for the Universal Music Catalog.
Still, we are nearly there, maybe a just a few more years. The music studios are ready and willing for a cash influx, Spotify is proving the market, and the big three online music retailers are positioned with massive online catalogs. Soon we will have Earth’s first – Universal Music Catalog – ad-supported, of course.