Apple’s latest – and long anticipated – cloud version of iTunes will launch today (Monday) with the full backing of the major record labels and the majority of indies.

Apple CEO Steve Jobs will announce details of iCloud at his company’s Worldwide Developers Conference, although Music Week understands that there may be a delay in iCloud actually going live.

The company was still negotiating with some labels and publishers at the end of last week, although deals were said to be very close to being signed off.

The fully licensed iCloud differs from earlier cloud services from Amazon and Google, which went live earlier this year without the backing of major rights holders.

“Apple runs a global business,” said Charles Caldas, CEO of Merlin, which negotiates digital deals on behalf of the indie sector. “The risk Amazon and Google took was based on the fact that product was only available in one jurisdiction – and I am sure they took a lot of legal advice before making that jump.

“On a global basis, they need the support and participation of the rights holders to make the products as great as possible.”

The music industry has been awash with speculation as to what features iCloud will include since news of the launch broke. Some commentators have speculated that it will include a commerce element, preview streaming via iTunes and the eventual launch of an iTunes subscription service.

iCloud could clear way for subs service

Apple, a company known for keeping a tight lid on all of its product developments, broke with tradition last week when it revealed that CEO Steve Jobs was to unbox iCloud at its Worldwide Developers Conference.

The fact that Apple had acquired the iCloud name ¬ owned by Swedish cloud storage firm Xcerion until April this year ¬ was only made public last week.

As with all Apple announcements, the news sent the music industry into a frenzy.

Critically, iCloud will be licensed ¬ deals with several labels have been in place for a number of weeks and Apple was closing in on key publisher deals at the end of last week.

Music Week understands that deals with independent labels are being brokered directly rather than on a collective basis and that the deals are extensions or revisions of existing licensing deals for iTunes, rather than new agreements drafted from scratch.

This will make the proposition very different from the recent cloud music launches from Amazon and Google, both of whom argued there was no need for licensing deals for users to upload and stream their existing music collections. Rights owners are currently contesting this behind the scenes.

The fact Apple has deals in place means that iCloud will be much more than a storage and locker service. There will almost certainly be a commerce element ¬ although it is unclear if that will be based on per-track streaming (something its 2009 acquisition of Lala could, in theory, cover), subscription, downloading ¬ or a hybrid of them all.

Analysts are also predicting that iCloud could allow for extended preview streaming via iTunes. The site has already offered 90-second preview clips in the US (higher than the standard 30-seconds elsewhere), so offering longer form, or even full, streams would not be a huge leap technology-wise.

This will depend, however, on the licences it secures and payment models it puts in place with labels and publishers.

Former Forrester analyst Mark Mulligan would like to see iCloud include “a platform for subsidised services [where] users will pay for premium devices with cloud subscription included music streams not from your collection [and] iTunes buyers will get streaming credits [and finally] unlimited on-demand content subscription [for] books, music, apps, games, music ¬ the lot”.

Meanwhile, We7 CEO Steve Purdham predicted that “scan & match” ¬ whereby Apple detects what you already have in your iTunes collection and unlocks streaming access to it, so the user streams from the Apple server rather than uploading duplicate tracks ¬ will be central to the offering.

“The classic iTunes ecosystems will make this an outstanding service,” Purdham said. “The question is about how it will be charged. I suspect an annual service charge which may be part of MobileMe. The big thing for me is that this is a stepping stone to iTunes subscription.” He continued, “The infrastructure is already there; once they get their purchasers to use the service it is an easy step of expanding from access to all your music to access to all our music, which will be great news for the bands and fans.” Merlin CEO Charles Caldas cautioned against seeing Apple as the only company that can push new mainstream services.

“We are starting to feel there is an evolution happening here [in the digital music market] that is leading towards a market that is more about access than consumption,” he said. “How that plays out for mainstream consumers will depend on how it is executed and what value it brings to those consumers.” Unlike its two biggest US rivals, Google and Amazon, Apple¹s approach is less about being first to market and more about being first to market with a fully functional and fully licensed service that will have support from copyright holders.

However, no matter what Apple unveils this week ¬ and the presence of Steve Jobs suggests it will be a significant announcement ¬ it will not be set in stone and any service will doubtlessly evolve over the years.

Apple has constantly updated and refreshed its product lines ¬ from laptops and iPods to iTunes and iPads ¬ and so what iCloud is in June 2011 will really only be a whisper of what it is in June 2012, when the speculation around iCloud 2.0 will, inevitably, raise its head.

Software as key

As a piece of software, iTunes has been criticised for becoming a sprawling, patchwork affair as new functionality has been added over the past decade.

Initially it was designed for ripping and managing music from CDs, then came iPod management and the iTunes Store. Alongside that came Genius recommendations, iPhone management, iPad management and Ping, its white elephant of a social network.

Software designers have blamed its increasing sluggishness on the fact that it is being asked to do far more than it was initially conceived to do and a total reboot is essential to get it working at top speed again.

Tellingly, Spotify attempted to address this with its recent iPod integration, a bold move to make it, rather than iTunes, the default music player for many consumers.

Because iTunes has become a very cumbersome piece of music management software, the hope is that its migration into the cloud will erase a lot of the software problem the average iTunes user experiences.

Apple will also be looking to put the numerous missteps of its MobileMe offering (linking email, calendars, contacts and cloud storage) behind it.

Leaked details of Apple meetings suggested a furious Steve Jobs demanding to know why MobileMe was a disaster at launch. It is not a huge leap to believe that iCloud will have been rigorously tested to avoid similar launch problems.

Part of the reason that Ping stumbled out of the gates last year was the withdrawal, at the last minute, of Facebook Connect integration.

Speculation abounds that iCloud will pick up where Ping dropped the ball.

Facebook, like Apple, has placed an enormous emphasis on design and UI (user interface), so any meshing of the two would have serious quality standards to meet. And after MobileMe and Ping, Apple really cannot afford to release another half-baked product into the market.