Amazon to match Apple’s musical cloud

Amazon, the world’s largest online retailer, is rumoured to be close to an agreement to launch a cloud music service that is similar to Apple’s iTunes Match offering.

According to tech blog CNET, the company has been negotiating with major record labels Universal, EMI and Sony, and is on the verge of an agreement with Warner Music Group.

If the deals are confirmed, Amazon will join Apple in having persuaded the traditionally difficult labels to allow online mirroring of a users’ music collection.

Currently, Amazon offers cloud storage to US-based users, with their Cloud Player enabling music playback. However the process of uploading an entire music collection can be longwinded and complicated. Apple’s iTunes Match scans a music collection and then offers mirrored copies from their own catalogue, saving a great deal of time and bandwidth. Amazon is expected to offer something similar to this.

Alternative services like Spotify and Rdio allow streaming from a wide catalogue of music, but are reliant on a subscription and this does not mean ownership of that music for the user.

Labels have been reluctant to offer up licenses for online music services as they don’t see the similar returns that physical sales have provided. Google has been unable to strike a deal with the labels for their music service, and Apple took years to settle on a deal that provided the labels with a satisfactory return.

Eventually Apple persuaded the labels that by offering a subscription service that scanned people’s existing record collections, it allowed labels to retrieve some money that they may have lost through the pirating of that music. Presumably, Amazon is set to offer labels a  similar revenue stream.

The question now is if Amazon’s move into the market will turn people away from streaming services like Spotify, and give people’s mp3 collections a second life online.