Amazon needs a way to hold on to its music customers in a post-CD era, and tightly integrating its new cloud music service with Amazon MP3 purchases might help it do that, but the concept of a "music locker" is not exactly the most innovative approach and could face licensing issues, according to analysts.
Amazon this week unveiled a new cloud-based music service that provides users with up to 5GB of free, online music storage, and 20GB of free access for a year if they purchase an album via Amazon MP3. Beyond that, it's $20.
"Amazon needs to establish a strong post-CD role for its music customers, [and] this smartly positioned locker service is an important first step in building that future role," Mark Mulligan, a Forrester research analyst, wrote in a blog post.
Mulligan cautioned, however, that Amazon Cloud Player is not exactly revolutionary. "As logical a next step in the digital music market as locker services might be, they're not an innovation in the music product. They're simply giving people access to the music they have on the devices they own."
Ross Rubin, executive director of industry analysis for NPD Group, echoed those sentiments, pointing to several previous attempts to launch music lockers, including MP3Tunes.com and Lala.com, which Apple purchased in late 2009.
Tying Amazon purchases to the cloud storage, however, is "certainly a convenience," Rubin said in a phone interview.
"We've certainly seen other consumer cloud storage services – ranging from hosted solutions such as Dropbox to locally resident options such a Pogoplug – provide interfaces for music libraries, but to have it so integrated with the retail experience could help facilitate access to music purchases for Amazon," he said.
As for the 5GB cap, "it's not a lot," Rubin said, but it is a "pretty good selection to have available from virtually any network connection." And if you buy an MP3 album, you get 20GB, which is "four times the size of the first iPod and more than many consumers have on their smartphones."
At this point, the service is only available for Android devices, which Rubin said it not surprising "given that Amazon has the ability to sell music directly to owners of that OS and has been the default music store for many of those handsets. It is a platform on which they can integrate the experience."
Apple is rumored to be working on its own cloud-based service thanks to the Lala acquisition, but so far nothing has been announced. Apple is reportedly being held up because it cannot secure the necessary record label licenses, something Amazon did not do for its Cloud Player.
"The important factor with this service is that Amazon requires customers to upload their music file by file and store them rather than matching them against a cloud-based central repository of music, much in the same way that Carphone Warehouse currently does in the UK with its Catch Media-powered cloud locker service," Forrester's Mulligan said.
"We don't need a license to store music," Craig Pape, director of music at Amazon, told the New York Times today. "The functionality is the same as an external hard drive."
Some labels might disagree with that assessment. A Sony spokeswoman told Reuters that the company was "keeping all our legal options open" regarding Amazon's service.
Michael Gartenberg, an industry analyst at Gartner, tweeted today that he suspects Amazon's service is the "best they could do with nasty license issues."
"Better to wait and get it right IMHO. Not sure who will use this," he continued, pointing to SugarSync and Box.net as examples of services that offer more value.