Record Labels Fuming over Amazon Cloud Drive

Record labels are fuming at Amazon, which unveiled its cloud-based storage for music on Tuesday.

Sony Music spokeswoman Liz Young said the company was keeping its legal options open, but would not say more than that.

According to others in the music industry, the problem is that Amazon is offering a paid streaming service, and that the holders of the content licenses should be paid accordingly. Amazon maintains that the Cloud Player is no different from offering a customer another hard drive to store their music on. Since the customer has already paid for the music, and is the only one that could listen to it, a license fee isn't necessary.

An anonymous executive told Reuters that Amazon only notified the record companies about the service a week before it went live. It isn't clear whether Amazon plans to seek licensing deals now or whether it will carry on as before. A call to Amazon for clarification was not answered.

Amazon is the first company to offer cloud-based storage, but there are rumors that others, notably Apple, might take that route as well. But one reason some analysts think Apple is taking longer to roll out its own service is that it is trying to work out a licensing deal with the record labels, whereas Amazon did not.