On Tuesday Amazon.com launched the “Amazon Cloud Drive”. The service allows users to host all their music in the cloud and stream it to a PC, smartphone or tablet. The problem with this gigantic step is, the record labels are not pleased with that move, because they don’t know how to handle licensing agreements for such service. The lawyers are gearing up.
According to CNN.Money.com, the major problem is that technology is evolving faster than business models. What? Streaming music over the internet is an old hat! One has to wonder how much longer it takes the labels to come up with something. Sony Music and all the others, the times of selling vinyl records is over, don’t you get it? And by now, after 10 years of ongoing declines in CD sales, you should have a business model.
The technology for such a streaming service is around for 15 years or so. There was licensing problem then, just as it is today. Remember Napster and those? Then, the labels could play on time because the infrastructure, internet over a modem, helped them to put the issue aside. Today, streaming music and movies is not a problem anymore and is practiced as good as possible, allowed or not.
The labels, with dragging their heels, are wasting billions of revenue and profit for themselves. Business models for them are almost public knowledge, all it takes is getting up and do it. And, the potential is gigantic, not only for the labels. Looking at it from an economists few, this can create an incredible boost for an economy and is almost public interest.
One of the models that could work is incorporating advertising. Let the artist advertise before every song plays for 10 or 15 seconds. As an example, if you sell Lady Gaga’s newest hit on a platform such as Amazon’s Cloud Drive, she can promote her Ray-Ban glasses or whatever she wears on her nose. There is a lot of room for playing around and make a ton of money. I don’t think an artist would mind some extra money, just like the labels wouldn’t. Of course, they can offer, as an alternative, a higher priced product without the advertising. This is just one opportunity for the labels. They need to step on the devils tale and go. While going along, lots of opportunity will evolve.
I applaud Amazon for taking this “first” step. It is not going to be easy. However, this will hopefully get something going, possibly wake up the sleeping giant. Let them “roar” and complain. Maybe one of these sleeping executives at those labels has a rest of functioning sense of business. Sometimes people need to be forced into their luck.