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The Apple iCloud Announcement: What's a Rumor, What's True

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By: Spacelab Research Staff
June 06, 2011

It's almost here ... the big announcement of what Apple's new iCloud service really is. The iCloud rumors and speculation have ranged from a cloud-based storage service for all kinds of files, down to a dedicated streaming music service based around iTunes.

Most of the media now believes that iCloud is a Web-based service allowing users to stream purchased music to an Apple device, like an iPhone, iPad, or computer. The iCloud announcement is set to happen on Monday, at the June 6 Worldwide Developers Conference (WWDC) in San Francisco.

This would heavily contend with the Google Music and Amazon's Cloud Drive Music Player offerings.

"It looks like Apple will likely offer some base service for free. Competitors, including RIM, Google, Amazon and Microsoft already have a hard time competing with iTunes as it is, but we believe will likely find it even tougher with iCloud enhancements," Sterne Agee analyst Shaw Wu said when speaking to Reuters.

That also comes with the theory that with a free iCloud service, you get ads. If you want to get rid of the ads, you can sign up for the paid subscription for somewhere around $25 a month.

"The company plans to eventually charge a subscription fee, about $25 a year, for the service. Apple would also sell advertising around its iCloud service," said the LA Times in a report.

The iCloud rumors turned into iCloud news last week, when Apple issued a press release saying that their WWD conference would introduce "Lion, the eighth major release of Mac OS® X; iOS 5, the next version of Apple’s advanced mobile operating system which powers the iPad®, iPhone® and iPod touch®; and iCloud®, Apple’s upcoming cloud services offering."

Apple has been working towards licensing agreements with the major recording labels,and it is now widely believed that Apple has paid between $100 million and $150 million in advance payments to all four of the major recording labels for use of their music on an iCloud music service.

According to Greg Sandoval, CNET's Media Maverick (who gets the scoop on all of these kinds of things) said that Apple had been talking to movie studios as long as two years ago, in an attempt to license movies for iCloud storage. This could mean files that a user already owns (legal or not) and not just iTunes-purchased movies.

Disney, Paramount Pictures, and Sony Pictures all have a deal with Apple, but Time Warner is still trying to work out a deal because they have an HBO blackout window to contend with. This gets sticky around around movie broadcasts on HBO, which require a blackout of the broadcast of the same movie on other outlets. Can you imagine not watching a movie you have stored in iCloud just because HBO wants to broadcast it?

Check out more about steaming music sites in the Spacelab Streaming Music Guide.

Tags: Apple, Digital Music News
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