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Music Labels Not Yet On Board With Apple's Cloud-Based iTunes Strategy

Friday July 2, 2010 9:30 am PDT by Eric Slivka

Addressing yesterday's report of cloud-based iTunes streaming coming "soon", CNET's well-connected Greg Sandoval reports that things still may not be as far along as many observers would like, as music labels have reportedly yet to sign on to the deal.

While it's hard to say what Boy Genius' source meant by "soon" it's worth noting that Apple has yet to obtain necessary licenses from the top four recording companies, according to multiple music industry insiders. They added that Apple has indeed engaged in discussions with the music labels but the record execs haven't even seen all of the details yet.

The way some at the major labels see the situation, Apple could enable iTunes users to stream songs from a home computer to other gadgets without requiring new negotiation, but for Apple to stream music from the company's servers to computers and other gadgets, the labels would require CEO Steve Jobs to cut a new deal, the sources said.

The report notes that Apple could try to press the issue and roll out a cloud-based streaming service without negotiating new deals with the music labels, although it would likely find itself in court to address whether such usage is permitted under current licenses.

So, unless Apple is ready to go to war over this, don't expect an iTunes cloud service--at least one offering music--anytime soon. Music insiders say that while that the whole sector would welcome an iTunes cloud service, negotiating the licenses will likely take months.

The possibility of a cloud-based streaming service for iTunes has been a hot topic of conversation since Apple's acquisition of music streaming firm Lala Media late last year, as users look forward to the ability to access their music on a variety of Internet-connected devices without the need for manual syncing of content or significant local storage requirements.

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