Lots of Talk About Digital Music Clouds

flickr: MiiiSH

Digital music buzz is all about cloud based streaming services these days. Apple bought Lala and Microsoft launched a new “entertainment vertical” for Bing that ties in full song streaming from Zune. Two weeks ago HP acquired Melodeo. And Google is supposedly readying a mobile music platform that will launch with Android 3 and include anywhere access, paid downloads and subscription aspects. The big tech companies seem to be scrambling to gain position in the cloud based streaming music space.

Meanwhile Forrester has released a report that finds that cloud based streaming on mobile devices is still more buzz than reality. The new study “360 Music Experiences: Use the Cloud to Target Device Use Orbits” focuses on the impact that cloud based services have on the devices consumers choose to listen on. 41.6% of Adults 18+ are still tied to their pc as their primary source of digital music. MP3 players ranked second at 32.5%, music-enabled phones at 12.1% and home streaming devices at 11.1%. Mobile access to music services through smartphone apps, while certainly an area of great activity, has yet to have a substantial impact.

Keep in mind that these findings are based on 3Q 2009 data, and many (but not all) cloud based services are either still in the works or have launched since then. But the report expects listeners to stick with a device of choice for cloud based streaming even with the option to listen anywhere on any connected device.

In addition to the question of what device listeners choose to listen with, there’s the issue of how the space will monetize. MOG, Rhapsody, Rdio, and others are betting on a subscription model that enables listeners to pay a monthly fee for on demand streaming. MSpot and MP3tunes offer storage space or “music lockers” for your personal music collection – free for small amounts of storage, monthly fees for larger amounts. Google will likely pursue an ad based strategy in keeping with its other platforms, while Apple may create a hybrid that expands on its iTunes (pay for downloads) brand, and incorporates its new mobile ad platform iAds.

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