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Posted by Mark Mulligan on August 12, 2010
Cloud functionality is becoming increasingly important to music product strategy as illustrated by another product launch today: digital radio manufacturer PURE announced the launch of cloud-based music service ‘FlowSongs’, powered by the UK’s 7digital (now 50% owned by HMV). To be precise the service isn’t a pure cloud service but instead leverages the cloud to deliver a music download store. The service is integrated into PURE’s Web-connected digital radio devices. For an annual £2.99 subscription fee, users get to identify an unlimited number of songs (using Shazam’s music recognition technology) and can then buy tracks for £0.79 each. Tracks are downloaded to a supported PC but are streamed to the radio.
Integrating Shazam is a smart move. Shazam is a feature not a product, but along with volume, it’s one of the key features that every audio device should have. The service will certainly drive discovery-based purchases (Forrester's Technographics® data shows that 57% of consumers discover new music via radio, making it the No. 1 discovery channel). But those benefits aside, I’m not convinced this is a killer service, yet at least. There was an opportunity to make this a frictionless access-based subscription service whereby customers could instantaneously replay the songs on a device that they identify without having to invest in a download. The future is in access-based models, not the dead-end street of the download store.
Also, the service isn’t without controversy. It appears that not all labels have licensed the streaming component of the service. Beggars Group’s Simon Wheeler has so far gone on record stating that PURE and 7digital do not have the requisite licenses from them.
Whether or not it emerges that most other labels have indeed licensed, there is a growing trend of cloud music services coming to market with incomplete or non-existent record label licenses. Both Michael Robertson’s MP3tunes and UK’s Psonar have launched cloud locker services that give consumers unlimited access to cloud-based versions of their music collections without record label licenses. Both services are entirely intentionally challenging current licensing frameworks, with the working assumption that licenses should not be required as they are extending consumers’ fair use terms. The record labels disagree, to the extent that Robertson is caught up in a bitter and very personal legal fight with EMI.
Some cloud services are playing by the rule book. The UK’s Carphone Warehouse launched its true cloud ‘Music Anywhere’ service last week based upon Catch Media’s fully licensed white-label solution. Catch Media worked long and hard securing those licenses, so it could be forgiven for feeling aggrieved at the likes of Psonar and MP3tunes taking licensing short cuts. But at the same time, it is clear that something needs to change on the licensing front if cloud music products and services are going to fulfill their potential.