Two days ago my mother texted me (yes, texting is not reserved for just kids). She just read a New York Times article about iTunes' new cloud service. Her question was whether the cloud would hurt my business. I have received this question from many other people including my business partner, employees, and label partners. There has been an amazing amount of chatter on the various blogs and user groups. In fact, I don't recall another subject in the past couple of years that has stimulated so much discussion. I dont want to argue the merits of any of their business models (e.g., iTunes' music match). That is too much speculation. But after a week of reading all of the entries that I can, I feel it is time for me to cast my opinion on the general impact of these new services into the blogosphere.
First, let me share a very nice summary of the big three cloud services from Appolocious: Click Here
So, now my answer to the Ultimate Question (and it is not going to be "42") of whether the cloud is good or bad for us?
This may sound like an obfuscation. But it's a serious answer. I really don't think that any of the cloud services will make much of a difference to the income of most labels. All of the cloud services are not much more than a glorified hosting service for music that you either already have or purchase from the respective service. They are not going to replace any of the existing subscription or music recommendation services because cloud services don't supply a comparable product.
It is plausible that the cloud services may stimulate purchases of a la carte music because each of the services makes it so easy to put those purchases in your respective cloud accounts. But their effect will be hard to predict.
It's quite possible that the big winner might be the music publishers. That is so because their share of the cloud revenue is higher than their share of downloads (12% vs. 9%).
In the end, I think that most of the talk aboutnthe cloud is hype. It will likely be a cool way of accessing your music and seems to be a nice step in the direction of music industry's Holy Grail of a celestial jukebox. But, I'm sorry to come to the following nebulous conclusion that I really don't think that the cloud services will greatly change the buying habits of the typical music user one way or the other. It makes for fun reading, though.