Amazon Is Now Ready To Take On Apple In Online Music Market

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AMZN: Amazon logo
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Amazon

Amazon (NASDAQ:AMZN) has been moving quickly in cloud-based music streaming space. It launched Amazon Cloud Drive to compete with Apple‘s (NASDAQ:AAPL) iTunes + iCloud offering which is poised to dominate the online music downloads and streaming space. When Amazon launched the Amazon Cloud Drive, it didn’t have any major licensing deals in place with any of the major music labels, which put it at a significant disadvantage compared to Apple. [1] [2]

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Reportedly, Amazon’s cloud music service now has full licensing support by the top four record labels including Universal, Sony, EMI and Warner. It’s not clear how exactly the licensing arrangements will work, but there might be some changes to how Cloud Drive and Cloud Player work. Amazon will now also be able to offer the Scan and Match feature, which enables users to scan their hard drives and automatically detect songs and add them to their cloud drive instead of manually uploading them.

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Having licensing deals in place also clears all potential legal issues associated with allowing users to save music in the cloud. Google (NASDAQ:GOOG) is now the only major player without licensing deals with top music labels. Amazon is on a better footing now, as its service works with both iOS and Android devices. It recently launched a Cloud Player App for iOS, which enables users to stream the music stored in their Amazon Cloud drive on their devices.

Amazon can now leverage not only the Kindle ecosystem, but also the iOS and Android ecosystems to sell digital media content, which is expected to drive sales for the e-commerce giant in coming years.

We currently have a $222 Trefis price estimate for Amazon, which stands near its market price.

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Notes:
  1. Amazon’s music cloud is licensed by all top labels, CNET []
  2. Amazon Reportedly Inks Deals With Four Major Music Labels, Apple Sweats a Little, Hot Hardware []