Wk16: Up In the Air – the battle for Cloud Computing

Just a really good album with the word cloud in it

Amazon opened up a Pandora’s box a few weeks ago in the US. They offered a “cloud service” to their customers for music. A 5GB (or 20GB with conditions) “locker” where you can upload your music and stream it back to your devices. It opened up a larger debate about the legal issues – what new rules are needed in this new space.

But does it matter? Will technology once again speed past the ability for lawyers to make decisions. The conversations around cloud computing – are they the right ones?

And the fight over the rules for music – how does it effect the internet as a whole? Are we short changing the idea of the cloud for something as small as music?

Tech heads have been talking about “cloud” computing for a long time. But it’s been with us for a while now – in the form of webmail. No need to download your emails to a computer – it’s all online to be accessed from any net capable device. That is the idea behind Amazon’s service – for music.

Record companies and Amazon immediately locked horns. Amazon didn’t seek permission from labels to do this – they just did it. Whereas Apple and Google have been talking to labels for months about doing the same thing.

This has good and bad consequences. Good that progress is made by those willing to drag the rest of the world to it. Bad that the pressure is on and some snap judgements could be made in hot blood.

I will say this – at this level of business, and with the money at stake, it’s pretty silly to imagine any new business ventures involving music can be done without talking to lawyers. Which makes Amazon’s move much more interesting. Is it bravery, or bravado? Have they decided this is the way the world is going, and they might as well get there first?

It is the way the world is going, and it’s interesting once again that the fight is over music when it could be over anything. And it will affect everything.

Cloud computing should ultimately stream anything. Documents, videos, books and more. The ramifications for what Amazon is doing will affect everyone. The laws put in place now will govern all other industries.

It’s surprising that it’s left to music lawyers to clean this up. With the record companies barely the bones of what they once were, are they really the best team to be doing representing all content? Especially in their desperate state?

And like piracy before, will we wait another ten years before the might of the TV and film studios get involved? Or books?

Because here’s the problem – if the cloud is our only way to “own” content, should we be paying for each play? Or should there be ads in that space. Should everyone have access to my locker to see what I bought so they can advertise to me?

Above and beyond retail (like Amazon) and industry (like the Music Industry), who is protecting the consumers?

Another big pro for cloud computing is we don’t have to worry if we drop a harddrive on the ground. My friend Bret recently took his hard drive into work to copy a few things and ended up corrupting it somehow. It is this sort of stuff that will seem as hokey as those circular dialers on telephone. The idea of losing a file – ever – will be gone.

This is a wonderful thing – yet we still have to argue about red tape.

What the hell are these companies complaining about?

It’s a bigger issue than music.

I have seen some discussion about how “cloud computing” validates piracy. It seems a petty thing when the ideas around ownership are challenged.

Music is also in a unique place when it comes to the idea of ownership. It is one of the few “media” we are used to owning. For decades, the music industry has fed itself on the revenues of sales – music fans buying a record or CD outright, playing it as many times as they wish.

In TV and film, this is new. Movies still make money at the cinemas, and TV on the box (although that money is quickly going away). We as consumers don’t really have that sense of ownership with movies. Many of us are happy to watch a film and not buy it. And then there are years of video rentals. This is a bit more like what music companies want from streaming – a bit of money per play, not per customer.

Then there’s books. Libraries have started to stock e-books! And the idea of accessing a book for free for a read has been around for centuries. Should publishers get money per “play” in the digital era?

Everything in the digital world comes down to ones and zeros. Books, films and music are all the same. All can be placed in a cloud.

We approach each media differently, but someone will have to come up with a rule that fits everyone. And someone is not going to be happy.

Of course, it all comes down to money. A recent Guardian article (link) published that Lady Gaga made only £167 for 1 million plays of Pokerface on Spotify. A figure used by recrd companies to show how unviable streaming and the “cloud” space are.

But lets unpack that figure. These are PLAYS, not SALES. In the CD era, how many times do you think people would have listened to this track per sale? Once? Twice? Ten times? Considering how beloved she is, and how some rabid fans probably listened every day, lets say it was ten plays. That’s 100K of listeners for £167.

Still seems like very little, but Spotify only has 1 million customers anyway (as of March this year). Might seem like a lot, but last year Apple had 50 million. Facebook has 500 million. We are dealing with global figures, and huge internet properties.

Think of it this way. If there was ONLY a Spotify version of Pokerface, worldwide – what would the plays be?

Would it be 500 million users? Lets follow our above formula (one in ten Spotify users listened to Pokerface ten times).

500 million plays.

500 x £167.

£83,500 for one track.

Now forget it’s Lady Gaga for a second. Does that not seem like a kind of reasonable amount of money for one hit pop song?  We are supposed to be moving away from flash-in-the-pan one hit wonders. And Gaga – with many singles, touring, YouTube royalties, publishing etc – sounds like it’s leading to a reasonable pay day – not a ridiculous one.

But we are so worried about now. And now isn’t going to matter in a couple of years for music. Everyone else will fly by us, and we will still be arguing about rates and royalties still. I looke at Metallica’s continued boycott of iTunes and laugh. And wonder if the entire music industry will go the way of Metallica.

There’s still a long way to go. Amazon’s opening salvo has it’s limits. It doesn’t play on Apple devices for example.

But it’s a start. And it’s a start that could get stifled really early. And push back cloud computing for a few years – or hamper it with stupid licensing rules forever. Luckily, I have faith in the piracy and boffins sector to circumvent any rules. With any luck, industries will remain short sighted about technology loopholes.

So if someone doesn’t build lockers for us, we will start building them ourselves. The beauty of the open internet.

Technology moves on. We can see this now, more than ever.

Yet big companies, especially in entertainment, still try to hamper progress. They have their reasons – money, rights – but they are trying to hold back a wave.

It’s time to ride the wave, and while you’re on the beach metaphor, look up and see how wonderful the clouds look.

Spotify sales article in the Guardian – [http://www.guardian.co.uk/music/2010/apr/18/sam-leith-downloading-money-spotify]

Apple’s iTunes number – [http://www.informationweek.com/news/storage/virtualization/225800173]

Spotofy’s One Million users – [http://www.spotify.com/int/blog/archives/2011/03/08/spotify-reaches-one-million-subscribers]

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