By Daniel Eran Dilger

Published: 04:00 PM EST (01:00 PM PST)

While ostensibly beating Apple and Google to market with its music locker service, Amazon's new Cloud Drive online music streaming service was launched before licenses from music owners were in place, threatening a new legal battle.

According to a report by Reuters, Sony Music spokeswoman Liz Young said her company "was upset by Amazon's decision to launch the service without new licenses for music streaming."

"We hope that they'll reach a new license deal, but we're keeping all of our legal options open," Young said.

Sold before the deal was struck

The report cited a source "close to the discussions" between Amazon and the music labels as saying that "music labels were alerted of the plans last week," and that Amazon only addressed "the issue of negotiating licenses" after the fact.

Amazon's move was described as "somewhat stunning," leaving some media industry members to view the service as illegal.

"I've never seen a company of their size make an announcement, launch a service and simultaneously say they're trying to get licenses," the source said, who was described as a music executive requesting anonymity.

Amazon appears to have jumped the gun in a bid to get ahead of Apple. While Amazon entered the music download market in late 2007, offering both slightly lower prices on MP3s and bargaining with the labels to offer DRM-free music before Apple, its music service still hasn't significantly encroached upon Apple's dominant position with iTunes.

Online storage held up by music negotiations

Amazon's Cloud Drive provides users with 5GB of free storage (or 20GB for $20 annually) that can be used to upload music for playback via an Android app or through Amazon's Cloud Play website, which organizes music into playlists.

Since last July, Apple's iDisk feature of MobileMe has similarly enabled users to upload their music (and other files) to the cloud for streaming playback (even in the background) from mobile devices via Apple's free iOS iDisk app, but the company doesn't promote the feature due to ongoing negotiations with the labels.

iDisk is also not depicted as a music cloud service, and does not provide any special display of metadata; music files simply play in place from the online storage just as they would from any web server. Music files can also, like other iDisk documents, be shared with other users.




Music labels have long insisted on special "streaming licensing" for users that want to copy their own music to the cloud for their own mobile playback, something that has held up efforts by Apple, Google, and others to deliver legally legitimate cloud music services.