As cloud-based music lockers have begun entering the mainstream, particularly embraced by major players like Apple, Amazon and Google, new legal issues are emerging as the convergence of new cloud-based storage mechanisms and channels of distribution with entertainment content continues to usher in novel copyright questions for stakeholders to grapple with. Some of these issues were tackled at a recent MIDEM conference in Cannes:

The legal questions about digital lockers and the “cloudification” of entertainment content focus on the balance between copyright holders’ exclusive rights to reproduce and publicly perform their works and consumers and service providers ability to make lawful use of such content through emerging technologies, in each instance, without directly or secondarily infringing copyright holders’ rights. The panel at MIDEM, “The Cloud… Is it Just a Legal Issue?” focused on storage services, including those to which consumers upload songs and those that offer scan-and-match capabilities. The panel sought first to define the music industry’s definition of “cloud.”  When asked, the panelists’ responses were mixed, with some saying it’s about content stored in a “locker,” and others saying it was a marketing term. Regardless, most agreed this means there are varied models that seek better monetization of the cloud.

When addressing arguments that accessing music stored in a cloud locker is not a commercial activity — that is, one that shouldn’t trigger payments back to rights holders–Richard Conlon, BMI’s senior VP of corporate strategy, communications and new media dismissed this as “a bunch of baloney.  It is a commercial activity.”

Concern was expressed that cloud lockers don’t distinguish between purchased downloads and illegally acquired content.  Additionally, once users are accustomed to streaming the music they own, they may become more open to streaming music they don’t. Scott Bagby, head of strategic partnerships at Rdio, responded that “the majority of consumers want to pay artists, they want to do the right thing.” But Bagby added that it is vital for rights holders to provide music at a cost that suits consumers.

Conlon added that right holders aren’t seeking outrageous prices nor claims. “It’s not about rights enforcement,” he said, “but about making markets and putting a layer of economy over these activities.”

Mitch Rubin, head of music publishing business affairs at Nokia, encouraged music companies to be more flexible in their licensing terms. “At the end of the day, we have to look at what the consumer is willing to pay,” Rubin said. “In our business, we have seen our models that have huge quantity might be better than a huge transaction fee. We need flexibility in licenses, so we can do experimental licenses. By and large, rights owners have been amenable to that. If that continues, everything will be in the right direction.”