Amazon streaming service could face legal challenge

When I first mentioned the possibility of a cloud media service from Amazon, I noted that (according to the article) Amazon was still in the process of acquiring licenses, but might announce it before I had all of them in order. But according to Ars Technica, it seems Amazon decided (much as competing services MP3Tunes and mSpot did) not to bother with licenses at all.

Amazon holds that its service is, in principle, just like people putting their music on an iPod or external hard drive and listening from there, and for that they don’t need licenses. But the record labels are a bit less sanguine, and it may not be long before they take the same sort of legal action against Amazon as they have against MP3Tunes.

At TechCrunch, Robin Wauters interviewed the founders of MP3Tunes (Michael Robertson) and mSpot (Daren Tsui) on what they thought of Amazon’s service and its pricing scheme. Robertson in particular sees the possible legal response and its repercussions as being important to similar services in the future.

“Amazon’s entrance into the business is enormously significant because it will dictate whether Apple or Google enter into a license for their own service or go the unlicensed path. If the labels take no action against Amazon, then expect Apple and Google to follow in their footsteps”, said Robertson.

“While the upload process can be a bit time consuming, that’s a small one-time price to pay for sidestepping expensive licensing bills and onerous restrictions. Apple will surely go this route if Amazon suffers no repercussions.”

Robertson, of course, founded MP3Tunes as something of an in-your-face move when the record labels forced him to shut down an earlier streaming service that allowed users to register CDs they owned and then stream music on those CDs from its servers. Record labels rose to the bait, and the case is still being litigated.

Record labels, of course, want licensing money from everything they can get. One of the possible reasons that music games are on the decline is the license fees record companies wanted for their music to be used in them. And the fairly insane (in terms of ratio of price to length) market in ring tones is another great example. Pay them money for being able to put the music on the cloud and stream it over the Internet? “Yes, please,” the labels would say.

This could have implications going beyond music streaming services, of course. If uploaded music becomes legal to host commercially in the cloud, then so do other forms of media including movies and e-books. (Though e-books really don’t need a commercial service to host them, given that it’s entirely possible to do so on one’s own with a free Dropbox account and Calibre.)

Amazon’s service is priced fairly competitively with other services’, though any of them could adjust pricing down the road. It will be interesting to see how this all comes out.