Amazon’s new front in digital media war

Amazon has opened a new front in a digital media battle with Apple and Google, beating rivals to the punch in offering to store US customers’ music collections on its servers, for them to access from any computer, Android phone or Android tablet.

The plan, which follows months of negotiation between record labels and Apple and Google about licensing the “cloud” storage offerings they plan to launch within a few months, surprised and divided the music industry.

“We are disappointed that the locker service that Amazon is proposing is unlicensed by Sony Music,” a Sony spokesman said.

Other labels would not comment, but executives were privately split, with some examining whether Amazon had breached contract terms and others saying the e-commerce group had told them it would seek a licence for an expanded service in the coming months.

The service Amazon announced late on Monday will be inaccessible from Apple’s iPhones and iPads. Consumers must upload their music from their computers to Amazon, to play on its Cloud Player, which can be viewed in any browser or be used as an app for Android smartphones.

Jeff Bezos, founder and chief executive, said Amazon was helping to solve the “mess” of managing a digital music collection.

Mark Mulligan of Forrester Research said Amazon’s CD sales had lost ground to Apple’s iTunes digital music service and that its absence of a music device equivalent to its Kindle e-book reader had weakened its MP3 music store.

“A locker service is effectively an alternative way to build an ecosystem that ties customers in,” he said.

NPD analysts estimate that Amazon has 12 per cent of the US digital music market, well behind iTunes with 69 per cent.

“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,” said Colin Sebastian at Lazard Capital Markets.

Amazon Web Services is already a leading cloud services provider for business, and Amazon Cloud Drive will offer 5Gb of storage for free, rising to 20Gb for one year if a user buys an album from its MP3 store. Without such purchases, Amazon will charge $20 a year for 20Gb.

This compares to Google’s charge of $5 a year for 20Gb of cloud storage for non-music files. Google demonstrated a cloud music service last May, but negotiations on licensing agreements with record labels have dragged out.

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