Friday, May 20, 2011

Prediction: a One-for-One Cloud by the end of 2011

The Los Angeles Times is reporting that Apple has reached tentative agreements with all four major record labels that would allow users to listen to songs from the cloud. The last major to drop being Universal.

But Apple is not saying, nor is hardly anyone asking, what rights users will have once they purchase a song that goes straight into the Apple cloud?  Why could a user not transfer ownership of his song to another cloud user? Why could he not lend it to another user?  With cloud access, this is a simple matter. It is called a "One-for-one Cloud". If a user sells his song to another user, that song is removed from his account. If a user lends her song to another user, it is removed from her account for the loan period.

So why would not Apple make this possible? One reason is that the record labels have reportedly given Apple the go-ahead to accept illegal songs into the cloud as well as legal ones.  So if they allowed someone the right to sell or lend a song in the cloud, they would be allowing people to make money from illegal songs. 

Apple will have to tell its users, "Yeah we know you bought a song from us fair and square. But, we had to make room in our cloud for the thieves, you understand? So we cannot allow you the freedom to sell the record you paid for.  You will have to deal with having fewer rights than every record buyer since the invention of the phonograph: the right to sell your property, lend it to a friend, even the right to leave it to your spouse.  Even though the technology is easy for us, and we could do it without breaking a sweat, we won’t, just because we are Apple, and you are not.”

So if Apple is “like that”, why are you predicting a “One-for-one Cloud” by the end of 2011, Emmett?

Because users will clamor.  Because artists, who have been screwed by labels long enough and who can now register their moral rights in songs and can easily be paid a portion of the cloud transfer fee, will clamor.  And there is competition (thank heavens).  Amazon will move to a One-for-one Cloud. Then Google.  Apple will eventually have to throw in.  Voila, a One-for-one Cloud!  Or the beginnings of one anyway.  (Getting the illegal songs that were foolishly allowed in the cloud out of the cloud will take some time.  Verification of every lawful purchase, physical or digital, that a user wants placed in the One-for-one Cloud will take some time.)

The DCE is the trusted third party that can verify and clear a “One-for-one Cloud” for Amazon, Google as well as Apple. The DCE is the only third-party with the know-how (gained from decades in the securities industry) to fulfill this function. Just as the New York Stock Exchange and the American Stock Exchange both participated in the Depository Trust Company in the 1970s, Amazon, Google and Apple will one day all participate in the Digital Content Exchange.

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