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Evolution of Music in the Cloud

MUSİC in the CLOUD Cloud-based music changes the tune by changing the delivery model. In 2010, digital music revenues accounted for nearly half of record company revenues. This shift is changing the face of how we buy and listen to music. How much of an impact? TAKEA LOOK! Music Revenue Mix By Decade Vinyl Cassette CD Digital 1980 60% 20% 2% 1990 49% 45% 1% 2000 93% | 1% 2010 49% 40% 20 40 60 80 100 NOTABLE BREAKTHROUGHS 1993 MP3 and the Internet MP3 Underground Music Archive born 2001 Napster hits 1.5 million users and is shut down 2001 Apple releases the iPod with iTunes software DIGITAL MUSIC EXPLOSION $7 BILLION SPENT ANNUALLY ON ONLINE MUSIC. 16.5% OF INTERNET USERS PURCHASE DIGITAL MUSIC IN THE US. 2004 • Less than 60 licensed music services • 11 million songs • $420 million dollars 2010 • Over 400 licensed music services • 25 million songs • $5.2 billion dollars (4 times the combined online revenue of books, film or newspaper) 8 TOP5 DIGITAL MOVERS OF 2011 (as of July, 2011) 4,120,000 UNITS SOLD E.T. by Katy Perry (featuring Kanye West) 4,089,000 UNITS SOLD Rolling in the Deep by Adele 3,229,000 UNITS SOLD F**k You (Forget You) by Cee Lo Green 3,029,000 UNITS SOLD Born This Way by Lady GAGA 2,734,000 UNITS SOLD S&M by Rihanna TODAY'S BG PLAYERS- Amazon Cloud Drive RELEASED: March 2011 WHAT IS IT? Music storage service that works with Amazon MP3. Upload tracks from your library to Amazon's cloud to listen or download tracks on other devices. HOW MUCH MUSIC? 5,000 songs for $20 a year TRACKS IN THEIR LIBRARY: 17 million (66,000 GB) OF NOTE: Amazon is the biggest seller of CDs in the world. iTunes Match RELEASED: November 2011 WHAT IS IT? Music storage service that works with the iTunes store and Apple mobile devices. The service matches tracks in your library to Apple's library and if your song isn't already there you can upload it. HOW MUCH MUSIC? 25,000 songs for $24.99 a year TRACKS IN THEIR LIBRARY: 20 million (78,000 GB) OF NOTE: Made for Apple devices, no support for Android mobile or Windows Mobile . Google music RELEASED: November 2011 WHAT IS IT? Music storage service that allows you to upload your music library via Google's Music Manager app and listen or download tracks on other devices. HOW MUCH MUSIC? 20,000 songs for free TRACKS IN THEIR LIBRARY: 13 million (51,000 GB) OF NOTE: No Warner Music tracks yet which make up about 20% of music sold in the US. Spotify RELEASED: July 2011 (in the US, in the UK since 2008) WHAT IS IT? Music streaming service with an ad-supported free level and a premium level that allows you to listen to your library and Spotify picks on multiple devices. HOW MUCH MUSIC? Unlimited picks from the Spotify library combined with your library. TRACKS IN THEIR LIBRARY: 15 million (58,000 GB) OF NOTE: Unlike digital locker services above, Spotify is more like a rental service that picks up your current tracks and gives you access to Spotify's massive library. DIGITAL MUSIC ISSUES PORTABILITY: Many services make moving your music cumbersome from having to download all the tracks in your current cloud to uploading them all to a new service to being tied to a specific platform (i.e. no iTunes for Android and Amazon for Apple) to subscription-type services where you never owned the tracks at all and are forced to re-create playlists and select your favorites again in a new system. INDUSTRY IMPACT: Between 1999 and 2009, the number of people identifying themselves as employed musicians dropped by 17% in the midst of a 53% decline in recorded music shipments and that with streamed music it can take up to 64 streams for an artist to equal the 99¢ iTunes track purchase price for a song. LEGAL POSITIONING: A 2011 ruling in the MP3 tunes case protects "music locker services" under the Digital Millennium Copyright Act of 1998 stating that the MP3 tunes cloud music service didn't violate copyright laws because it uses a single copy of a file on its servers instead of storing 50 copies for 50 users. SOURCES

Evolution of Music in the Cloud

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