Apple's iCloud free at first, then $25 a year, sources say
Music industry insiders allege that Apple's forthcoming iCloud service will have an initial free period for iTunes Music Store customers, but the company plans to eventually charge a $25 a year subscription fee.
The Los Angeles Times confirmed on Thursday earlier reports that Apple had finalized contracts with the last of the major music labels, according to sources familiar with the negotiations.
"The service initially will be offered for a free period to people who buy music from Apple's iTunes digital download store," the report read. "The company plans to eventually charge a subscription fee, about $25 a year, for the service."
It is unclear, though, whether the report refers to the cost of the whole iCloud service or just the streaming music feature. By comparison, MobileMe, Apple's current online storage and sharing solution, costs $99 a year.
In addition to charging a subscription fee, "Apple would also sell advertising around its iCloud service," the report noted, without providing details on why Apple would both charge for the service and sell advertising. Sources also indicated that Apple "envisions the service to be used for movies, TV shows and other digital content sold through iTunes."
Sources told AppleInsider on Wednesday that Apple could offer general iCloud features free to Mac users who make the upgrade to Mac OS X Lion, though a music streaming service would likely come with a price tag. Music industry executives have previously suggested that Apple's cloud-based music service could be free at first, but would eventually cost money.
People knowledgeable with the terms of Apple's agreements with the music labels claim 70 percent of the revenue from iCloud's music service will go to the labels and 12 percent will go to the publishers, leaving Apple with 18 percent, according to Thursday's report.
However, those numbers contradict a report from CNet earlier on Thursday that alleged Apple would keep 30 percent of revenue and share 58 percent with the labels and 12 percent with publishers. That report also cited sources claiming Apple's streaming music service won't be available on Monday "but will be offered soon," though it will reportedly store only music purchased from the iTunes.
Apple is set to unveil the service next Monday at the Worldwide Developers Conference keynote in San Francisco, alongside a preview of Mac OS X 10.7 Lion and the introduction of iOS 5. Banners posted in preparation for the event have revealed the iCloud icon.
The Cupertino, Calif., company is said to have pushed up the release of the iCloud service because rivals Amazon and Google have launched their own cloud-based music storage solutions, though Apple differs from its competitors in that it renegotiated licenses from rights holders. Amazon has reportedly faced a backlash from record labels for initiating its Cloud Drive online music streaming service without new licenses.
The Los Angeles Times confirmed on Thursday earlier reports that Apple had finalized contracts with the last of the major music labels, according to sources familiar with the negotiations.
"The service initially will be offered for a free period to people who buy music from Apple's iTunes digital download store," the report read. "The company plans to eventually charge a subscription fee, about $25 a year, for the service."
It is unclear, though, whether the report refers to the cost of the whole iCloud service or just the streaming music feature. By comparison, MobileMe, Apple's current online storage and sharing solution, costs $99 a year.
In addition to charging a subscription fee, "Apple would also sell advertising around its iCloud service," the report noted, without providing details on why Apple would both charge for the service and sell advertising. Sources also indicated that Apple "envisions the service to be used for movies, TV shows and other digital content sold through iTunes."
Sources told AppleInsider on Wednesday that Apple could offer general iCloud features free to Mac users who make the upgrade to Mac OS X Lion, though a music streaming service would likely come with a price tag. Music industry executives have previously suggested that Apple's cloud-based music service could be free at first, but would eventually cost money.
People knowledgeable with the terms of Apple's agreements with the music labels claim 70 percent of the revenue from iCloud's music service will go to the labels and 12 percent will go to the publishers, leaving Apple with 18 percent, according to Thursday's report.
However, those numbers contradict a report from CNet earlier on Thursday that alleged Apple would keep 30 percent of revenue and share 58 percent with the labels and 12 percent with publishers. That report also cited sources claiming Apple's streaming music service won't be available on Monday "but will be offered soon," though it will reportedly store only music purchased from the iTunes.
Apple is set to unveil the service next Monday at the Worldwide Developers Conference keynote in San Francisco, alongside a preview of Mac OS X 10.7 Lion and the introduction of iOS 5. Banners posted in preparation for the event have revealed the iCloud icon.
The Cupertino, Calif., company is said to have pushed up the release of the iCloud service because rivals Amazon and Google have launched their own cloud-based music storage solutions, though Apple differs from its competitors in that it renegotiated licenses from rights holders. Amazon has reportedly faced a backlash from record labels for initiating its Cloud Drive online music streaming service without new licenses.
Comments
This is another example where Apple's cash hoard gives it competitive advantage (the other being ability to pay up front for long-term supplier contracts). Given that music content is a low-margin business for Apple, but helps it sell its hardware, it will be a huge win.
iOS 5 + iCloud better give iPhone, iPod touch and iPad ball and chain-less local out-of-the-box activation. Then I can recommend an iPad to my both Aunts, but not before that.
Crap... then the analysis begins...
Hey, I pay for movies and still get ads. I pay to go to the ballgame and still get ads. I pay for magazines and still get ads. I pay for cable and still get ads.
Didn't you get the memo?
Unless you can put all your music in it, no matter where you got it, it's useless.
That's my problem with it, too. Well, that and not really knowing what the hell it is.
The "security". They already have your credit card. They know what you bought in iTunes. They know what else you have in Genius. What new security issue?
As for the utility - if you don't get it you don't get the iPhone or iPad.
I can't wait until Monday so all the rumors are put to rest...
Crap... then the analysis begins...
Yes, the usual suspects are already panning it here. See a post or two above. The whining and declarations of D.O.A.! will ensue like the sun rises in the east.
$0.00 - $25.00/year starting to get closer to the actual value of the service, IMHO, than the $100.00/year of MobileMe. Although even at $0.00 I won't be using it due to it's security issues and lack of utility.
Since details have not been announced, what "security issues" and what " lack of utility" do you write about Mr. FUD?
I wouldn't be surprised if it's 70-12-18.
This is another example where Apple's cash hoard gives it competitive advantage (the other being ability to pay up front for long-term supplier contracts). Given that music content is a low-margin business for Apple, but helps it sell its hardware, it will be a huge win.
How much do you suppose it cost them? $40 billion? $50 billion?
It would be very nice if over-the-air syncing of basic stuff like emails and contacts formed a complementary service for those with an iPhone/iPad. The data involved would be negligible compared to something like streaming video content.
Wishful thinking probably.
Crap... then the analysis begins...
No, the whining.....
Yes, the usual suspects are already panning it here. See a post or two above. The whining and declarations of D.O.A.! will ensue like the sun rises in the east.
I see that you got in before I did!
How much do you suppose it cost them? $40 billion? $50 billion?
No, more like the $2B - $3B check Apple signed to build the service, plus the recurring operating expenses. The latter will probably be paid for from the 18%).
(I know where you're going with this question, but I don't wish to go there).
Based on that interesting little revelation, what do iTunes and iCloud do with music or video currently in my library that was not purchased through iTunes (i.e., Amazon, etc)? Do I maintain two libraries but only have access to onevia iCloud?
I am also a little concerned about the integrity of my existing library given recent faux pax's where data was lost as a result of various upgrades - I do NOT want to lose a large percentage of an 80K+ library, ya know?
Unless you can put all your music in it, no matter where you got it, it's useless. If you have data plans that are capped, even worse. How can you stream with a cap?
I agree with your first point. I don't believe for a second that it will only support music bought through ITunes - that would be a massive fail. Too much music in too many people's iTunes libraries were put there from music previously owned. Here's one way they might get around fears of pirated content being suddenly "blessed" when found in your library - perhaps they'll require that anything that will go to/come from the cloud will have to have been ripped through iTunes, thus proving that you at least had a physical CD at some point. Not foolproof, but could weed out music that's just been shared and passed around. I'm hoping to see some sort of much-higher quality music coming down from the cloud - instead of 256k kbit AAC's, how about an option for Apple Lossless, or other variations of better quality than what we now get from iTunes? That would be awesome.
As for the caps that all the carriers are imposing, that's another beast altogether. It will be fun to watch all this play out.
Music industry insiders allege that Apple's forthcoming iCloud service will have an initial free period for iTunes Music Store customers, but the company plans to eventually charge a $25 a year subscription fee.
[...]
However, those numbers contradict a report from CNet earlier on Thursday that alleged Apple would keep 30 percent of revenue and share 58 percent with the labels and 12 percent with publishers.
allege, as in "done something wrong or illegal"?
$99 a year ad not being able to use your own @.com (I don't want to forward, it all gets messy)
At 25 a year I'd use it for sync, but I doubt Apple will let you use your own domain for email which will be disappointing.
audio and all, as someone else said. Cap data and drop outs make that all seem useless. If you can't upload your library that's pretty useless. If your purchases on iTunes are no longer susceptible to being "lost" with no recourse to get them back, that's excellent.
Soon we shall know.