Update on Apple’s Adventures in the Cloud

This week Apple announced the features of its cloud based music service “iCloud” which will be available this fall. The features not only include automatic transfer of new iTunes purchases to iCloud, but the ability to access any music in your iTunes library without having to upload the music to the cloud. iTunes does it for you. Under its new license agreements with the four major record companies and, so far two major publishers, Apple has gained the right to copy music from its server to the cloud and allow consumers to access their music without having to upload it themselves. iCloud will also automatically transfer all purchased music from iTunes to all your Apple portable devices including iPhones and iPads. This means that the user will no longer have to sync their devices to iTunes in order to listen to new purchases on their other devices. iCloud is not just for music, you can also transfer to the cloud Apple apps, iBooks, documents, calendars, emails and personal settings. iCloud will give the user 5GB of storage space but music, apps and iBooks will not count against the 5GB.

Apple must still negotiate licenses with the indie labels but having all the major labels opens a huge catalogue of music to iTunes users. According to CNET, Apple has cleared publishing with Universal Music Publishing and Sony/ATV, but must still finalize deals with Warner/Chappell, EMI and indie music publishers.

According to Billboard online, the major labels will be entitled to 58% of revenue from iCloud, and music publishers will be entitled to 12%. Apple intends to offer the indie labels 53%, but it has been reported the indies are holding out for more money.

It is worth noting that Apple is also in the process of negotiating deals with TV networks and movie studios in order to place movies and TV shows in the cloud as well.

These moves put iCloud well ahead of its competitors, Google and Amazon. Unlike iCloud, users of Google and Amazon’s cloud based services have to upload their music files themselves, and that can hours, or for large collections, days.