Apple's Cloud Music Strategy

While most music industry pundits have been predicting that music streaming would soon hit critical mass, it certainly isn't here yet even though it continues to grow. Those same pundits also declare that if Apple would change iTunes to a streaming instead of a download model tomorrow, the rest of the world would follow, which is no doubt true.

The Apple streaming anticipation has grown to a fever pitch, especially after last year's acquisition of Lala, but don't expect that to happen any time soon. Here's why.

1) Downloads are still a big business.

2) Streaming requires new license agreements with the record labels.

But aren't there rumors abounding about Apple in new license talks with the major labels? Yes, they're having those discussions, but not for the reason you think.

Indeed, Apple will soon be announcing a new cloud service (storage via the Internet instead of on board your device), perhaps as soon as the beginning of April, but the idea is that it offers a sort of "insurance" for the end user in case her songs are wiped out on her computer, iPhone or iPod. If all your songs live in Apple's cloud, you can access them from any device instead of storing them locally (although you can do that too, or both). Hard drive died? No problem, the songs are stored in the cloud.

The problem is that the record labels wanted to get paid for a second download for the cloud privilege, so Apple had to enter into new licensing discussions as a result. Who wants to buy the same music twice?

Want another good reason why you'll see an Apple cloud service soon? We'll all soon be living in a tablet world, where iPads replace laptops so you won't have as much on-board storage. But you won't need that storage either, if everything lives in the cloud. Expect Apple to call it something other than "the cloud" though. Right now, the bets are on "personal locker."

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