Amazon launches Cloud Player music locker service [Updated]
The service, called Amazon Cloud Player, lets users upload their music to an Amazon server and play songs from any Web browser or by using an application on mobile phones or tablets that use Google's Android operating system.
Apple Inc. and Google Inc. are rumored to be busy building a similar service but have not yet launched them. Apple's plans, which observers have dubbed SkyTunes, would involve the company's existing MobileMe cloud service.
MobileMe lets users upload documents and access them from any Web browser, but does not currently let users play music files. Apple has been negotiating with music labels and publishers to obtain the licenses that would allow music to stream from its servers, according to people at several major record labels.
Apple's plans for a locker service is viewed as a largely defensive maneuver to neutralize Google, which is negotiating with record labels for the licenses it needs to launch a music service for Android devices later this year, according to people knowledgable about the negotiations.
Amazon's announcement, however, beat both Apple and Google to the punch. And its service appears to be designed to compete aggressively with its slower-moving rivals. Its service gives users, for free, 5 gigabytes of music storage -- the same as the original iPod, which Apple Chief Executive Steve Jobs touted as "1,000 songs in your pocket" when introducing the device in 2001. Customers who buy a digital album from Amazon's online MP3 music store would get 20 gigabytes for free for one year. It's unclear whether Amazon plans to charge for cloud storage after the one-year promotion.
Apple currently charges MobileMe users $99 a year for 20 gigabytes of storage.
Amazon also trumps Google by being first on Google's own Android operating system.
For cloud lockers, there is a slight "first-mover" advantage. Because users must upload their music collections to the locker, a process that can take hours if not days, they would be hesitant to switch services or subscribe to multiple clouds.
Although a dominant player in the sale of physical goods, Amazon is still ramping up its digital content business, which includes music, movie and game downloads. Amazon's 10% to 15% share of the digital music download market lags far behind Apple's iTunes' share of 70% or more, according to estimates by Lazard Capital Markets.
"Amazon’s move confirms that a land grab is playing out between Apple, Amazon, Google and, more recently, Facebook, racing to secure market share in all forms of digital media: music, videos, books and other content," Lazard analyst Colin Sebastian wrote Tuesday in a note to investors. "Critically, the common denominator for all these services is the requirement for a large-scale web-based infrastructure, which all of these companies possess. We believe that Amazon is particularly well situated here."
Updated: This post has been updated to include comments from Lazard Capital Markets analyst, Colin Sebastian.
-- Alex Pham