Your Music and the Cloud in the Next Five Years

Google joined Amazon last week in the cloud music storage party, and Apple is rumored to be coming to the dance soon. But with the biggest names in Silicon Valley trying to shove all our music into the cloud, are consumers ready to follow suit?

Streaming services like Rdio and MOG have more and more consumers caring less and less about the notion of actually owning the music they listen to, and analyst Aapo Markkanen of ABI Research says if we aren't on the bandwagon, we soon will be. But he doesn't expect Google's Music Beta or Amazon's Cloud Drive to be the killer app that convinces us to allow all our tunes to float up into the atmosphere. Instead, he's betting on streaming services.

"The number of subscribers to mobile music streaming services (worldwide) is expected to approach 5.9 million by the end of this year," says Markkanen. "ABI Research believes that number will exceed 161 million subscribers in 2016."

ABI says that growth will be largely driven by people moving from MP3 players to their smartphones for listening to music, as well as a gradual decline in the price of digital music subscriptions.

Technology expert Hap Aziz with Rasmussen College says streaming subscriptions are a harder sell in the near term.

"There are literally millions of music players in use that are not able to access content through the cloud," Aziz wrote in an e-mail. "I don't see people now throwing away their perfectly good MP3 players to run out and spend $100 or more for a WiFi-enabled device."

Despite the increasing ubiquity of 3G and 4G service, Aziz adds that the availability of low-cost data plans seems to be trending in the wrong direction to promote a widespread move to the cloud.

"The major wireless providers appear to be phasing out their unlimited data plans, so this does not set a positive stage... In two years' time, there won't be sufficient network connectivity (with a low enough cost) to allow us to move 100 percent away from local storage."

He believes the majority of users will still store their music locally in a few years, in much the same way that few people currently store all their photos on Picasa or Flickr, opting instead for a local drive.

ABI's Markkanen says the offline playback offered by the likes of Rdio and MOG offers local storage, albeit without the flexibility of full ownership rights that comes with MP3s. He concedes that might hold such services back, along with a lack of name recognition among average consumers.

"It's gonna take one of the big players to launch a subscription service and all those big marketing budgets to really push it to consumers."

Until that day, we're left with these few leading options for floating our tunes in from the digital ether. Aziz and Markkanen handicapped each service and came up with this primer on the current state of music in the cloud:

Rdio/MOG

Unlimited streaming subscription services have left Pandora in the dust in the last year, but it's not a new idea. In fact, Rhapsody has been doing it for years. Still, in recent months Rdio and MOG have generated the most buzz thanks to competitive pricing ($4.99 a month for unlimited streaming, $9.99 if you want to be able to play songs on or offline from a mobile device), deep catalogs (over 7 million songs for Rdio, more than 9 million for MOG) and ease of use. Choosing between Rdio and MOG has proven nearly impossible for me - while it sounds good to have 2 million more tracks to choose from with MOG, I've found Rdio's interface and mobile app to be a little easier to use. Rdio has also just released an API, which might make it a bit more ubiquitous in the months to come.

Hap Aziz notes that both services are less expensive than predecessors like Rhapsody or Zune. "I'm wondering when Microsoft will buy (MOG) to enter the space." But he adds that "many users will want to purchase their music as well, or else they find out they don't have a car at the end of the lease."

Amazon Cloud Drive

Amazon was the first big name to enter the cloud music game this year and Cloud Drive is exactly what it sounds like: a big chunk of server space for all your media that can be accessed from anywhere. Anyone can start off with 5 gigabytes of free storage easily upped to 20 GB for $20 a year, on up to 1,000 gigs for $1,000 a year. You can also buy a single MP3 album from Amazon and you'll automatically be upgraded to 20 gigs. Amazon doesn't offer unlimited streaming or any other free access to a huge library like Rdio and MOG, but it does allow storage of just about any kind of file and it syncs easily with Amazon's massive paid library, which is more than Google can say for its service. Cloud Drive is basically cheap file storage that's easy to use but comes with no security guarantees, sharing or syncing capability.

ABI's Markkanen says that approach makes sense for the company because a subscription service would cannibalize its music sales, but he has so far been underwhelmed by Amazon's offering - "this locker model is something that would have been quite revolutionary three years ago, but now in 2011 it's not that exciting anymore," he says.

Google Music Beta

Perhaps the biggest announcement from Google I/O last week, Music Beta, is currently a closed party - and since Google has yet to work out licensing deals with the record labels, it's also a bring-your-own affair. Music Beta is essentially the same concept as Cloud Drive, but with more free storage (once you've got an invite), up to 20,000 tracks. Google's user interface makes it easier to stream your music collection in more formats from home or a mobile device than does Amazon but is a little less versatile in terms of backing up other types of media. No official word on what pricing might be after the Beta, but it's worth heading over and requesting an invite to check out the party before the open bar ends.

"They surprised me," says Markkanen. "I would have thought since they're building it from scratch they would have gone for the on-demand side of things."

Aziz believes the strongest thing Google has going for it is potential integration with Google At Home, also announced last week - "How cool would it be to walk around the house and simply say out loud, "play the White Album"? Or to make verbal requests to the car radio. And with so many Android devices...."

Apple's Cloud Service (TBA)

It seems that Apple is taking a wait and see approach to cloud-based music. It bought and then shutdown a cloud music service, LaLa, last year and then has let Amazon, Google and smaller upstarts rule the cloud show. Some have speculated that Apple is letting Amazon and Google test the waters while it tweaks its own cloud service and irons out licensing deals with record companies that have been spurned by Cloud Drive and Music Beta. Apple could announce a new cloud music service with the recording industry's blessing that will make Google and Amazon's offerings seem quaint. Apple might also look for a way to compete head-to-head with Rdio and MOG on unlimited streaming, or just flex enough marketing muscle to drown the young services out.

Markkanen expects something from Apple similar to Amazon's Cloud Drive to integrate with iTunes. Aziz sees potential for added convenience if Apple secures licensing agreements that make uploading to the cloud unnecessary, but it may not be enough to convert all the Apple haters out there.

The Darkhorse Prediction

Hap Aziz thinks it's possible "Facebook will enter the media market as part of their strategy to keep people from leaving their site to transact business (or pleasure) elsewhere."

Meanwhile, I say cover all your bases by standing in line for a Music Beta invite, wait and see what Apple's up to and enjoy all the Rdio you want until then.

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