Will consumers buy movies, music they can’t even put on their iPod?

This newspaper article contains comments of mine about buying music and video you can only stream from the cloud. Publication date was November 2009.

Steve Lambert

Are you willing to buy a movie or a song that you can never keep in your home or even on your computer hard drive?

More and more companies are offering to sell you songs and movies that they store on their servers. They’ll allow you to access your music and films via different devices - anything from a mobile phone to an Internet-connected video player - as long as you’re OK with the idea of never being able to gain physical control of what you’ve purchased.

This system, another variation on the concept of “cloud computing,” where hardware or software isn’t owned but accessed on an as-needed basis through the Internet, is a dramatic shift in the concept of buying.

Consumers won’t be purchasing a physical product or even bits of data to download. Instead, they’ll buy the right to view a movie or listen to a song an unlimited number of times on a smartphone, computer or any other device connected to the Internet.

“I think this trend is absolutely inevitable,” said Geoff Ralston, CEO of California-based Lala, a company that sells online music. “It’s so much easier to deal with in every way. It’s (available) on all your devices, and always available to you.”

For just 10 cents a song, you can buy the right to stream tunes from Lala’s library through your web browser. For now, the service is limited mostly to computers in the United States. But the company, which has agreements signed with the major record labels, is working on applications for iPhones, Blackberries and other devices and plans to be available in Canada and elsewhere.

Ralston promotes online storage as hassle-free. Instead of downloading a song onto your computer and transferring it to various mobile devices - a move which might require you to convert the song to the format best suited for each device - you can let the corporation store the song for you and listen to it anywhere with a couple of clicks of your mouse, button or wheel.

Lala also offers music fans the traditional choice of downloading a song, for prices usually around 89 cents each, but Ralston sees the online storage option as the future.

Movie fans will soon get a similar service at Disney. The company is working on a system called Keychest which will sell consumers the right to view a movie or TV show, stored online, on a variety of devices an unlimited number of times, according to a recent report in the Wall Street Journal.

A similar system is in the works over at Digital Entertainment Content Ecosystem, a consortium that includes Sony, Warner Bros. and Fox Entertainment, although the group’s website is short on detail.

But are consumers willing to fork over money for something they can’t put their hands on? Can they trust that the permanent right to stream a movie or song will indeed last forever?

Ralston admits it’s an “emotional” hurdle for some people to overcome, but feels that as more and more devices are connected to the Internet, people will move to online storage for their media files.

One of Ralston’s competitors, Michael Robertson, CEO of MP3tunes, has lashed out at the idea of paying for music without being able to possess it.

“The labels … are the landlords of your music collection,” Robertson wrote in a recent blog.

MP3tunes does not sell music, but offers an online storage locker for music you have already purchased through iTunes or another store. Unlike Lala’s 10-cent streaming system, MP3tunes allows users to download songs from their locker and keep them. But prices start at US$39.95 per year for an account that can stream to both computers and mobile phones. Prices increase if you need more than 50 GB of storage space.

Brad Trupp, a Winnipeg-based software developer, likens services such as Keychest and Lala to renting a movie through video on demand, only the rental becomes permanent.

“It’s something most people will get comfortable with … but there are still people who would want a physical copy,” Trupp said.

The online storage could also provide music labels and movie studios with a new weapon in the battle against piracy.

It’s pretty easy, although illegal in most countries, to copy a compact disc or DVD and upload the material to share with others. But material stored online can have measures embedded to prevent copying, much like the way videos on demand are blocked from being recorded.