With the cloud revolution upon us, everyone is trying to get in (even though windows has had cloud computing for at least a year). Amazon has created a cloud where users could access their music anywhere at anytime. For this to work though the need the record companies to sing off on the legal rights. They first label to sign with Amazon was Sony Music, whom at first publicly said they were not going to support it. Both sides ave very quite on what actually happened to make the deal go through. Amazon is in talks with other major labels currently.
This was a big win for Amazon, but the party looks short lived. They beat their competitors into the cloud market, but Google and Apple are both in beta testing for their cloud service. It is only a matter of time till Amazon loses a significant portion of the market. It is also unclear with Amazon cloud, if users can move all their songs onto the system, or just music purchased on the Amazon website. Sony was placed in a join or die situation. They could resist the cloud but that would only hurt them. Most music no a days is illegally downloaded. Users are going to find one way or another to get the songs they want. This decision at least gives Sony a chance to profit from this market. Again, Sony will not be making significant money from this of for long. Once Apple and Google release their clouds it will look like a two man race from then on.