Here’s Why Amazon Picked A Fight With The Labels
Some are writing volumes about how the labels are going to force Amazon to license their new Cloud Player and Cloud storage locker. The real story is that Amazon already intended to. But in meetings late last week, they told the major labels that they were about to launch what they believe they already could – a place for people to store digital files in the cloud. Beating Google and Apple to the music cloud certainly felt good, but it's not why Amazon told the labels about the launch, rather than ask for their permission.
For years, Amazon has been a leader in the cloud storage businesses. Frankly, that business is almost certainly far more profitable than selling 99 cents downloads. So Amazon decided to launch this week because of their belief – and willingness to protect that belief in court if necessary – that storing digital files in the cloud doesn't require any different licence than storing them on your computer's hard drive.
Amazon does want to cut licensing deals with the labels. In fact, I'm told that they're working to right now. But their doing it to make their cloud locker and new music player much more robust. Not, in Amazon's view, to make it legal.