eMusic aims to launch cloud this year

Fri Jun 10, 2011 10:09pm EDT

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NASHVILLE (Billboard) - Subscription-based download store eMusic is planning to follow its competitors into the cloud in the second half of the year.

The company is "hoping by Q4 of this year" to launch the cloud-based service, CEO Adam Klein told Billboard.biz. The service will allow its customers to stream the songs they already own to multiple devices, he said.

If that model sounds familiar, it's because eMusic is taking the same approach as Apple, Amazon and Google. In the last three months, all three companies have launched cloud-based services that store users' music files and allow for playback on many Internet-connected devices. It's a model that emphasizes both ownership and access. "We think they're doing exactly the right thing," says Klein.

Another approach is to give consumers access to a large collection of songs. This is the business model of Rhapsody, Radio, MOG, Napster, Spotify and Sony's Music Unlimited powered by Qriocity. And as Billboard.biz has reported, Hewlett-Packard is in negotiations with rights holders to launch this type of access-based service. While most allow consumers to purchase downloads, these are primarily streaming services that emphasize access over ownership.

Both the access and ownership approaches to cloud-based services allow users to stream their music collections from a variety of Internet-connected devices. Amazon's Cloud Drive, for example, can be accessed through either the browser-based Cloud Player or its Amazon MP3 app for Android devices. Google's Music Beta similarly allows users to stream songs from a browser or Android app. Spotify, which has yet to launch in the U.S., has a hybrid model that combines its large catalog of songs with a user's locally stored music.

EMusic's plans to launch a streaming service have been in the news for nearly a year and a half. "We have a bunch of things in store for 2010 that will allow us to grow again and that includes streaming," then-CEO Danny Stein told Reuters in January 2010.

But in terms of subscriber count, eMusic has not grown. The introduction of a cloud service could help the company add to a subscriber count that has stagnated for the last four years (although the company claims to have increased average revenue per user by 22 percent in the last six months). Klein told Billboard.biz the company plans to add subscribers in the second half of the year. It recently spent four months on consumer research and plans to put that knowledge to use in upcoming consumer outreach programs.

Before the move into the cloud, eMusic will add streaming features to its existing store. In late July, eMusic will introduce what CEO Adam Klein called "elements of streaming for the purposes of previewing (songs) in a much more comprehensive way."

(Editing by Chris Michaud)

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