Carrier Support, Integrated Billing Could Boost Cloud Music Services, Executives Say
SAN FRANCISCO -- Cloud-based subscription music services remain a niche business but they could become mainstream with the support of wireless carriers and ISPs, who could integrate billing and help market the services, streaming music executives said Monday at the SF Music Tech summit. More than Apple, Google or Facebook, which are all expected to introduce cloud-based music services soon, ISPs have the ability to take subscription cloud music mainstream, said Jon Irwin, president of Rhapsody.
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If Verizon, AT&T or Comcast were to offer a data plan that includes a music subscription, it would boost the number of subscribers by an order of magnitude, Irwin said. For now, Verizon Wireless is taking an open market approach to cloud music services, with its V-Cast services, he said. “We're hopeful their next step is to actually create a data plan that would be the music data plan,” he said. Customers could choose levels of service much like they once did for long-distance calling services, he said. Pre-paid carrier Cricket Wireless’s music service seems to be off to a good start since its launch at CES this year, Irwin said. The carrier bundles voice, data, text messaging and an unlimited music plan on one bill, according to its website. “We're very keenly watching that, and excited about something that may start to move the carriers in that direction,” he said.
Working with carriers has been a boon to mSpot, which offers a cloud-based music storage service similar to Amazon.com’s, said its CEO Daren Tsui. “There’s a tremendous amount of power when the carriers get behind a service for music,” he said. “We're very bullish in keeping working with the carriers.” Consolidation in the wireless industry could be good for cloud music providers because it reduces the number of carriers to work with and could allow cloud services providers to reach scale more quickly, Tsui said. “Instead of working with 10 carriers you're working with three or four. That makes it easier and you get scale very quickly,” he said.
But ISPs have historically been reluctant to sign blanket licensing deals for music, said Larry Kenswil, an attorney with Loeb & Loeb. “ISP licensing by the labels has been a hoped-for prospect for 15 years,” he said. “The problem is the ISPs haven’t wanted to do it or if they talked about pricing, they were talking about pennies for the dollar,” he said. There’s little legal precedent governing the operation of cloud-based music services, Kenswil said. For a remote storage service such as Amazon’s, “if all you're doing is opening up a network drive for someone that they can access with a password, I don’t know that the sound recording copyright owner has a right to do anything about that,” Kenswil said. Other services would require other licenses, and the publishing rights are more complicated, he said.