Apple is making deals with record labels on a cloud music service

ITUNES PROPRIETOR Apple is apparently close to a deal with the music industry that will enable it to launch a cloud music service to rival one that Google and Amazon launched a few weeks ago.

The agreement, reported by sources close to the parties, according to Reuters, will see Apple partner with three of the four major record labels, giving it access to a catalogue of thousands of songs.

The three labels involved are Warner Music, which the sources say inked a deal two weeks ago with Apple, EMI and Sony Music Entertainment, both of which came to agreements more recently.

The last of the big four, Universal Music, has yet to make a deal with Apple, but one source suggested it will only be a matter of days before that will fall into place.

The deal will allow Apple to host a cloud-based music service related to its Itunes digital music store. Users will be able to buy songs, store them on a cloud service run by Apple and stream them to their devices, potentially limited to Apple products like the Ipod, Iphone and Ipad.

The service is apparently already developed, so it will likely be only weeks before we see a launch. Apple will undoubtedly be keen to get its Itunes cloud out there as soon as possible to counter any advantage its rivals have gained with their earlier launches. The sources indicate that the Apple Worldwide Developers Conference on 6 June is a likely date for the big announcement.

The deals mark a major victory for Apple and a significant loss for Google and Amazon, both of which were forced to launch their own cloud music services, Google Music Beta and Amazon Cloud Player, without the support of the music industry. This meant they became just storage and streaming facilities for songs, rather than music shops as well.

It's likely that Apple's current deals with the record industry and the overall success of Itunes put it in a stronger position than Google and Amazon. The rush to beat Apple might also have led to Google and Amazon cutting their negotiations short, but that could end up working to their disadvantage when people realise they can shop for songs with Apple's cloud.

Amazon faces possible litigation over its decision to go it alone without the backing of the music industry and Google could be hauled into the courts on the same grounds. Lawsuits might force both companies to enter into fresh negotiations with the record labels, but the terms of those agreements might be drastically revised now that Apple has signed the dotted line. µ