Record labels are once again under attack from the Internet, this time by companies eager to jump into the red hot “online music storage” arena. After what the labels have been through the last several years, you can bet they’ll be better prepared this time. Apple and Google have been working diligently on a new music sharing model which promises to give music fans more flexibility in accessing their media, wherever they are rather than tying them to a particular computer or mobile device (a service known as a music locker). Google, however, hasn’t been able to deliver anything to this point, despite promising to launch their service as far back as last Christmas. And neither has Apple’s which hasn’t launched yet. But surprisingly it was Amazon who became the first media company to launch a cloud-based consumer service – deciding to take a bold “Napster- like” approach last month with the launch of their version called “Cloud Drive,” as reported in this New York Times article.

Amazon initially thought they were sidestepping the sensitive music licensing problem by allowing its customers to upload their songs in MP3 or A.A.C. format and then storing it in the cloud, enabling consumers to play the music on any Android phone, Android tablet, Mac or PC, regardless of where they were. “We don’t need a license to store music,” said Craig Pape, director of music at Amazon in this Reuters article. “The functionality is the same as an external hard drive.” 

What Amazon neglected to do was license the rights, for this type of activity, from the major Hollywood film studios and record companies. The labels immediately fired back, but rather than engage in a nasty drawn out lawsuit the two sides quickly realized they needed each other (for now anyway) to compete in this new music sharing market, fueled by the changing desires of the consumer. Amazon is currently engaged in talks with all members of the big four (Sony Music Entertainment, EMI Group, Universal Music Group and Warner Music Group) to discuss how this latest business model can make sense for both sides. If the two sides come to an agreement, the way we access music will change dramatically once again; however, the question remains, how will the music industry be affected by this sudden access to online stored music files. And other than the consumer, who stands to benefit the most from this new platform?

David Bowie predicted in 2002 that music would become “like running water or electricity,” notes this article penned by John Naughton, The Observer. At the time of the original interview, Apple’s iPod had only just been released. Bowie understood that “iPod users were, in fact, the audio equivalent of travelers to primitive countries who carry bottled water because public supplies are unreliable or unsafe. In a comprehensively networked world, Bowie surmised, people would eventually become more relaxed about carrying their supplies of bottled music: when they needed it, they would just get it streamed from the network.”

I wonder what artists think of their content, once again, being downloaded and potentially shared by millions of people without a licensing arrangement on the table. Will Mick Jagger shout, “Hey! You! Get off of my cloud” (ok, that one was too easy) or will Rihanna say, “Come on, come on, I like it, like it.”?

The music industry continues to struggle to keep up with the consumer’s demands, but finally appears to have recognized its better in the long run to accommodate music fans rather than waste time in court.

What are your thoughts? How do you think cloud-sharing with affect the music and media industries? Share your thoughts with me and the readers of BurrellesLuce Fresh Ideas.