Will cloud storage help indie labels?
We've already taken a look at the big three cloud services from Apple, Amazon and Google, but what does any of this mean to local bands and labels? With talk of Apple paying $100 million to the major labels for the rights to store content in the cloud and the launch of its paid service imminent and someone collecting a portion of the $24.99/month fee, we figured it was time to figure out exactly what -- if anything -- is going to change.
There is a theory that Apple's monthly fee to use their scan-and-match system is viewed as back-payment for labels who've supposedly lost millions from piracy over the years. To that end, it's assumed much of that monthly fee will be distributed among labels (and eventually trickle down to artists) who have songs and albums being downloaded from the cloud. It's all very confusing -- but the basic idea is that if you didn't buy an album in iTunes, but you upload it unto Apple's servers using the scan-and-match service, labels might get royalty payments for that. If nothing else, the contract between labels and Apple is about to change.
According to CDBaby, one of the commonly used digital music distributors that helps labels and bands get their songs onto a number of different services, a little money might trickle down to smaller indie labels. "If you're a CD Baby member, these royalties will be added to your regular iTunes payments," said CDBaby's Chris B. It's assumed that other iTunes submission resources like IODA and Tunecore will do the same.
From a financial standpoint, nobody will get much in the way of benefits from Amazon or Google, as their terms and conditions have remained the same -- and cloud storage is not considered any different than storing music on an external hard drive.
Jason Cain, co-founder of Bocumast Records, is relatively indifferent on the topic, stating, "It would depend specifically on how the contract changed, but I have no qualms about our catalog being put on the iCloud servers. The listener already paid for the album; they're just paying for a backup service."
There have been rumors of smaller labels opting out of the service, although that likely means they'll be pulling their entire libraries off of iTunes, not opting out of the iCloud service specifically. Justin Gitlin of Plastic Sound Supply is a little more hesitant, "I wouldn't pull from iTunes, but I also wouldn't be happy if people are getting our music from iTunes and we don't get a cut," he says. "It certainly seems weird and nebulous, but as a tiny label, we need exposure, and iTunes is our largest digital music retailer."
We still don't know what amount Apple is going to pay out to artists and labels when music is uploaded into the iCloud -- and chances are if it's anything, it will be incredibly small: pennies a year for most artists. With the four major labels calling most of the shots, it's hard to get a good handle on where things will end up.
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