Users can now access their music from Amazon's cloud, listening to tunes without taking up space on hard drives. PHOTO: Combined Media/

Amazon announced “Cloud Drive” recently, adding fuel to an always hot debate about licensing of digital music.

According to Reuters, the service lets users “store about 1,000 songs on the [Amazon site] for free instead of their own hard drives and play them over an Internet connection directly from Web browsers and on phones running Google Inc’s Android software.”

Legal challenges and strategy questions loom heavy over the service says Ramnath K. Chellappa, associate professor of information systems and operations management at Goizueta Business School. His work as a PhD student in 1997 led to the scholarly definition of “cloud computing.”

“There are many dimensions to this,” Chellappa said. “In this case, the data happens to be music. We have the ability to pull stuff from the cloud… You have iPads and all these devices that are working so easily with 3G and WiFi available in a number of places. The cloud concept of having things reside somewhere else and bring it down on demand is very much a possibility.”

Chellappa, who consults on digital media in the entertainment industry, said some current liscensing agreements don’t explicitly cover this type of use but it’s a natural progression considering how the industry evolved with the explosion of iPods, iTunes and digital music retailers.

He said most music purchased can be copied by the user except if it’s a determent to the industry (creating mix tapes, burning CDs, etc.).  The professor said music subscription services like Rhapsody had little to limited impact on music consumption, but Amazon works in the song-purchase model.

“The question of where this is going is that if you put things on the cloud and people can get these things on demand…” Chellappa said. “What does it mean to actual purchase of music?”

Licence to stream the music itself raises more questions as, according to Chellappa, multi-channel consumption isn’t fully realized.

“At some level the labels will say we don’t license streaming of music… Amazon is saying it’s all the same thing, they don’t need a separate agreement,” the professor said.  “This has been playing out in the television industry already [with Internet viewing].”

Even if legal matters resolve, it’s unclear how consumers will respond. According to the Reuters report, there will be no iPhone app to stream music from Amazon’s cloud. There will be functionality on Apple’s rival Android (Google) operating system.

Chellappa didn’t rule out a similar platform rolling out on iTunes. He also said Google may look at music consumption on the cloud. But, regardless, strategy seems to lag behind technological advances.

“I’d wait to see what players it gets picked up on,” he said. “If it’s just going to be a web-based mechanism I don’t think it will be a big success.”