Amazon's music cloud gambit

07 Apr 2011

As you may have heard, has launched a new cloud-based service called Cloud Player that essentially offers MP3 hosting and playback. You can get free storage of 5GB, or 20GB if you buy an MP3 album from Amazon, and future digital music purchases won’t be counted against your storage cap. And you can listen to them either via a Web browser or an Android app.

Amazon is hardly the first digital locker service on the block – companies like mSpot offer similar services. But Amazon’s potential sweet spot is having a retail MP3 service to tie into it.

Not unexpectedly, the music labels are not happy, and are reportedly complaining that Amazon doesn’t have their permission to run a music locker service. Sony Music in particular is displeased – not least because they launched their own subscription streaming service in the states two months ago.

Amazon argues it doesn’t need a license for Cloud Player because it’s simply an app that lets users play their own music via a hosted service rather than their hard drive.

If it comes down to a legal battle, however, Amazon’s biggest problem is that it won’t be the first digital locker service to make that argument. fought Universal Music Group way back in 2000 over its service, and lost, points out copyright attorney and former Engadget managing editor Nilay Patel:

In court, argued that its service was the “functional equivalent” of users making their own local copies of songs, an act protected by fair use, but the court didn’t buy it. Because was the party that made the copies, it was found guilty of copyright infringement, and $53 million in damages later, the company went bankrupt.

That said, Patel adds, what could help Amazon get around this is bandwidth. That’s because circa 2000, broadband wasn’t as widely adopted, and where it was deployed, uplink speeds were excruciatingly slow – which meant services like had to duplicate the files themselves to encourage customers to use it.

These days, however, broadband really is broad enough to allow users to make their own copies and upload them, Patel notes:

If you’re a Cloud Player customer, you get a defined 5GB or 20GB of storage, and the music that lives in that storage is your copy. Your copy that you’re allowed to make. It’s not “functionally equivalent” to a fair use copy anymore — it is a fair use copy.

That in turn will force music labels to argue that it’s about content, not copies, which makes the odds of winning the same argument in UMG v. a lot slimmer under current US copyright law, Patel argues.

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