The Cloud Amazon has already shown itself to be a close student of Apple, modeling its initial Kindle strategy on Apple’s approach to the music business: drive down the cost of the content to drive up the value of owning the hardware, which translated into more high-margin hardware sales for Apple/Amazon.
With the announcement Tuesday of the Amazon Cloud Drive and Amazon Could Player, the online retail giant seems to be taking another page from that same playbook. As with iTunes in the beginning, Amazon Cloud Drive is being positioned primarily as a tool for managing your existing digital media library, this time in the cloud. What it doesn’t do very well, as Peter Kafka noted at All Things Digital, “help you find and listen to music you don’t own.”
Kafka considers that a drawback, but it’s right on schedule according to the Apple playbook. The first-generation iTunes software was released in 1999. It wasn’t until 2003 that Apple began trying to sell music tracks online. By that point, most iPod owners were pretty well invested in the iTunes platform. They were using it to manage their existing music collections and to sync it with their iPods. Once you installed the software, in fact, it went ahead and automatically indexed all the music on your hard drive, wherever it was filed, and made it pretty difficult to use any other software to manage your music, let alone transfer it to your iPod, so long as iTunes was still installed. So, when the time came to start acquiring new music, legally at least, it was only natural for iPod owners to buy through iTunes as well.
Amazon’s new software does something very similar. It automatically indexes your media collection, wherever it may be filed on your hard drive, and moves it to the cloud, where it can be accessed using the Amazon Could Player. The idea is to enfold consumers — Borg-like — in the Amazon cloud media management platform by leveraging their existing content libraries. Selling them new stuff through the platform presumably will come later, once the assimilation is complete.
Apple, incidentally, is almost certainly working on a very similar idea. As MP3Tunes CEO Michael Robertson pointed out more than a year ago, the software behind Lala, the cloud-based music streaming service Apple acquired in 2009 and shut down six months later, does basically what Amazon’s software seems to do, and is likely to play a critical role in Apple’s own cloud strategy:
As Apple did with the original iPods, Lala realized that any music solution must include music already possessed by the user. The Lala setup process provides software to store a personal music library online and then play it from any web browser alongside web songs they vend. This technology plus the engineering and management team is the true value of Lala to Apple.
An upcoming major revision of iTunes will copy each user’s catalog to the net making it available from any browser or net connected ipod/touch/tablet. The Lala upload technology will be bundled into a future iTunes upgrade which will automatically be installed for the 100+ million itunes users with a simple “An upgrade is available…” notification dialog box. After installation iTunes will push in the background their entire media library to their personal mobile iTunes area. Once loaded, users will be able to navigate and play their music, videos and playlists from their personal URL using a browser based iTunes experience.
Sounds more or less like the Amazon strategy. Or more accurately, Amazon’s strategy looks more or less like the Apple strategy.