Apple’s iCloud could be free to start, later cost $25 annually

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Apple’s upcoming iCloud service is looking to push users into the cloud -- or at least their iTunes music collection anyway -- and it will be doing it for free.

Well, at no charge to consumers to start.

But, later on, Apple is planning to charge iCloud users a fee of about $25 a year to upload their music collection to the tech giant’s servers so they can stream the music through a Web browser, or to whatever iPod Touch/iPhone/iPad or Mac they like, reports The Times’ Alex Pham over on our sister blog Company Town.


And while sources familiar with the negotiations between Apple and major record labels surrounding the iCloud service have said music listeners won’t have to fork over cash for cloud at first, funds will be changing hands between the companies involved to pull all this off.

Apple completed its negotiations with the four largest record labels on Thursday for iCloud, and is set to have contracts in place with music publishers by Friday, Pham reported.

From Company Town:

The agreements, finalized this week, call for Apple to share 70% of any revenue from iCloud’s music service with record labels, as well as 12% with music publishers holding the songwriting rights. Apple is expected to keep the remaining 18%, said people knowledgeable with the terms. Music companies that have signed on to iCloud include Warner Music Group, EMI Music Group, Universal Music Group and Sony Music Entertainment. Representatives from the four companies could not be immediately reached for comment. Though the service is initially focused on allowing consumers to store their music on Apple’s servers, the Cupertino, Calif., technology company ultimately envisions the service to be used for movies, TV shows and other digital content sold through iTunes, said a person knowledgeable of the company’s plans.

If Apple has, or gets movie and TV studios on board, that might pit iCloud as a challenger to services such as Netflix or Hulu, and put in competition with cloud-based music streaming services from Amazon and Google, which beat Apple to the market, but haven’t done so with the cooperation of major record labels.

Apple’s Chief Executive Steve Jobs will be unveiling the details of iCloud, iOS 5 and Mac OS X Lion, on Monday at the company’s Worldwide Developers Conference in San Francisco.



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-- Nathan Olivarez-Giles