Report: Apple Pays Big For iCloud Music Licences

Apple is reportedly paying big bucks for the privilege of having major music labels sign off on its upcoming iCloud service, according to new reports.

Three unnamed sources apparently told the New York Post that Apple had shelled out “between $100 million (£60m) and $150m” to license their music to the cloud-based service. CNET also reported on 2 June that Universal Music Group had reached an agreement with Apple, making it the fourth and last major record company to do so. The Wall Street Journal previously suggested that Apple had signed licensing deals with EMI Group, Sony Music Entertainment and Warner Music Group.

WWDC plans

Apple plans to unveil iCloud at its WWDC (Worldwide Developers Conference), which kicks off on 6 June in San Francisco. In a 31 May press release posted on its corporate website, Apple alluded to iCloud as an “upcoming cloud-services offering” but provided no further details. Current rumours suggest that iCloud will act as an online media locker, and perhaps offer some form of streaming content.

Apple faces substantial competition in the consumer-cloud arena from the likes of Amazon.com, which recently launched a cloud-based locker and player for music, and Google, whose own cloud-music offering recently launched in beta. Although Microsoft’s current cloud efforts seem primarily focused on the business-software side of the equation, Microsoft chief executive Steve Ballmer recently suggested that “every one of our products will be engineered to deliver the full benefits of the cloud”.

Neither Google nor Amazon secured licensing agreements with the major music labels before launching their respective cloud services. For its part, Amazon has argued that its cloud service is nothing more than a storage unit and therefore not beholden to licensing.

A cloud service could potentially assist Apple in blocking those threats. Certainly, the company’s massive data centre in North Carolina could serve toward that end. The next version of its operating system, Mac OS X 10.7 “Lion”, reportedly will also feature some cloud integration.

No new hardware

Blogs such as TechCrunch and Daring Fireball have spent the past few months insisting that Apple will debut no new hardware at WWDC, choosing instead to focus on previews of iCloud and the next versions of iOS and Mac OS. Apple’s 31 May press release confirms that focus.

Other blogs suggested that Apple would use the conference to debut the iPhone 5, in keeping with the company’s usual habit of releasing the newest variant of its popular smartphone during the summer timeframe; if such a thing is still in the works, however, Apple is keeping an extraordinarily tight lock on it.