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Music labels lash out at Amazon's cloud service

March 30, 2011 |  1:26 pm

Amazon is in a battle royale with music labels over its digital music locker service.

Launched on Monday, Amazon's Cloud Player is drawing criticism from record companies chagrined that the Seattle company did not secure music licenses from labels and publishers before releasing its service.

Sony Music Entertainment said in a statement, "We are disappointed that the locker service that Amazon is proposing is unlicensed by Sony Music, and we hope that Amazon will resolve the situation quickly by agreeing to a license with us. We are keeping all our legal options open." 

Sony's spokesperson, Liz Young, declined to define "legal options" and whether the company's statement suggests Amazon's service violates any sort of copyright law.

On Tuesday, Amazon fired back that it didn't need licenses to launch its Cloud Player, which lets users upload songs and play the music from any Web browser or device that uses Google's Android operating system.

Because the files belong to users, Amazon isn't required to obtain licenses to be able to store them on its servers and make them accessible to users. But that requires users to upload their music, a process that could take hours if not days for large song collections.

Competing services such as Rdio, which has licenses from the major record labels for a locker service, scan a user's computer to take an inventory of songs on the hard disc drive, a process that takes minutes if not seconds, and instantly make those songs available to stream.

Amazon continues to negotiate with record labels for locker licenses, according to an executive with a major record label. But Amazon's preemptive strike in launching the service without those licenses have irked the record companies. One executive told Billboard that Amazon's service was "third-rate."

Sony has hesitated to jump on board with so-called cloud services because of concerns about users uploading pirated songs to the lockers, along with legitimately purchased music, according to executives familiar with the negotiations.

If this tune sounds familiar, it's a variation on another kerfuffle the online retailer had last year with book publishers. Amazon triggered an uproar last year by insisting that Kindle versions of new releases be sold at $9.99. Publishers rebelled, saying the low price cannibalizes sales of hardcover bestsellers, priced at $25 to $30. The upshot? Amazon caved in, allowing some publishers to set the retail prices for Kindle versions of their titles.

Can't we all just get along?

-- Alex Pham

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