Apple plans to roll out its new iCloud music streaming service for free to entice users, but will then charge an annual fee. That is according to a report from the Los Angeles Times, which claims to have received credible details from insiders familiar with the deal.
The iCloud announcement is likely to be the biggest news to come out of Apple's Worldwide Developers Conference this week. Steve Jobs, who has been away from the company for months due to increasingly severe medical problems, will be headlining the event's keynote presentation later today and is expected to be the one who officially lifts the veil on iCloud.
While the service is essentially confirmed at this point, there remain several unanswered questions. For example, even though the LA Times seems to have strong information about the $25/year fee, even that is still not specific enough for users who want to know whether that covers the ability to both stream and store music, or if that only applies to the streaming service (meaning the online storage space would be an additional fee).
The switch to iCloud will signify a paradigm shift in the way users access digital content. In the world of Netflix and Hulu, users are less concerned with having actual media files on their computer and prefer to have content they can access from any device, anywhere, any time.
An earlier report from the New York Post claimed that Apple agreed to pay as much as $150 million in advance payments to music labels in order to get them to agree to allow Apple to make their music available on a cloud-based storage service.
Other companies, including Google, had been flirting with the idea of a cloud music storage/playing service, but it seemed there were always holdups in getting anything finalized. It was thus kind of a surprise when Apple seemed to score a deal so quickly.
Now we know why. It's always about money, and apparently Apple has no hesitation in cutting some pretty big checks in order to get the new project off the ground.