Apple's Deals May Transform Digital Music
The company's plan for “digital lockers” is winning over the major music labels — Compared with buying e-books, building a digital music collection is a hassle. E-books zip directly to reading devices like the Kindle and Nook and are backed up …
Context & Ripple Effects
This closes a loop that opened years ago, when Business Week argued Apple might be holding back the music business by defending its download model, and Slate declared the digital download dead a year ago. The intervening steps — Apple joining forces with record labels in 2009 and Bloomberg reporting last week that Apple had secured accords for an iTunes cloud service — now resolve into label buy-in for "digital lockers."
The framing matters because of the contrast with e-books: Kindle and Nook purchases sync and back up automatically, while building a music collection has remained a manual chore. If Apple's locker wins label blessing, it removes the licensing friction that kept music storage stuck at the file level while other media went cloud-first.
First-order effects
- The major music labels move from gatekeeping cloud storage to licensing it, giving Apple's iTunes ecosystem rights to host users' collections rather than just sell them files.
- Apple gains a way to showcase the service ahead of the Worldwide Developers Conference starting June 6, where a cloud-music launch is expected per the rumor reports.
Second-order effects
- Rivals without label accords face a choice between matching Apple's licensed locker or ceding the storage-and-sync layer, since a hassle-free backup is the feature that makes a music library portable across devices.
- Hardware partners in the media chain — the Kindle-and-Nook side of the comparison — see the bar rise for automatic library management, pushing every device maker toward cloud-synced media accounts.
Third-order effects
- If lockers become the default structure for purchased music, the unit of competition shifts from the individual track sale to the subscription-like relationship around a user's whole library — the structural change Slate pointed to when it pronounced downloads dead.
- Labels' willingness to license storage suggests a longer recalibration of their posture toward Apple, reversing the 2005-era dynamic in which Apple was cast as constraining the music business rather than enabling it.
The trend: Music distribution is shifting from per-file download sales to cloud-hosted libraries that follow the user across devices, with label licensing deals setting who gets to run the lockers.