Business Matters: Is it Curtains for HP's Planned Music Service?
Business Matters: Is it Curtains for HP's Planned Music Service?

While the music industry focuses on Apple, Google and Amazon, Hewlett-Packard is quietly making plans-again-for its own locker-based service. Multiple sources at the major labels report that the discussions are heating up.

The Palo Alto, Calif.-based computer and technology company is engaged in conversations with the majors about building a cloud service that would eventually offer music, movies and TV shows. Those discussions began a few months ago. In April, Precentral.net reported that a marketing presentation for HP's TouchPad (due July 1) noted that the device would include HP stores for music and movies.

"The TouchPad will come with a music-synching solution built in that utilizes cloud servers to synch and remotely store your music," the story said. The article also reported that marketing materials stated that the TouchPad would allow users to stream music they don't yet own.

While that indicates the scope of HP's ambitions, which music industry executives confirm, it also reveals that the company might've been a bit ahead of itself in those marketing materials. Why? Because, music industry sources caution, as recently as this week, that the discussions remain in the early stages, and that HP has yet to set up parameters for what it wants to do-or even a timeline.

"They're debating doing something like Qriocity for a variety of media, which can be delivered on any HP device," a major-label executive says. "We don't know how serious they are." That's because HP has been down this path before.

For almost a decade, HP has been studying the music industry trying to find a role for itself.

Between 2003 and 2005, it partnered with Starbucks as the back-end of the merchant's download-and-burn music kiosk effort. But that venture proved unprofitable and was abandoned. Last June, HP announced that it had acquired Melodeo, which through its nuTsie website allowed users to stream music playlists created by the nuTsie team, or by accessing users' iTunes libraries to tap stored playlists. The music can be streamed to computers or mobile devices, but the service doesn't have the necessary licensing for the user to make interactive song selections.

Three years ago, HP sent out an RFP (request for proposal) looking for digital music partners to help it build a music service, sources say. "They haven't shut the door on partnering," but that would depend on what services they ultimately decide to include, one source says. "In their talks with the majors, they're trying to narrow down what their service will look like."

Possibilities abound, and aren't limited to a consumer-based service. One such example: MPL Music Publishing partnered with HP to build a private cloud that would digitize, organize and catalog all of Paul McCartney's assets and his vast personal collection, which includes more than 1 million items, such as Linda McCartney's photo collection, years of video footage from live recordings, thousands of videotapes, rolls of films and reels, and hundreds of musical recordings.

In a statement made in May, HP executive VP of enterprise sales and marketing Jan Zadak said the company's work with MPL demonstrates how a music organization can achieve an "Instant-On Library to create, manage and distribute engaging content to an increasingly connected world." McCartney was scheduled to play HP's Discover America event in Las Vegas on June 9.

While the majors don't know how serious HP is this time around, no one appears to have doubts about the company's abilities. "They have the capabilities," a source says. "The question is, can they build something that is compelling, cool and dynamic that will appeal to music consumers." HP, through a representative, declined to comment on speculation.

"In March, HP announced that it plans to offer an expanded portfolio of cloud services for enterprises and consumers," an HP spokesperson said in a statement to Billboard. "HP sees cloud computing lying at the heart of a connected world."

Meanwhile, sources are unsure about how quickly HP could come to market, with some saying that nothing would be likely for at least six months. Moreover, sources say that HP has been on the backburner for the majors while they place most of their attention on negotiations with Apple, Google and Amazon. But if HP decides to go forward it wouldn't necessarily be the last to market with a full-blown service, as all three of the aforementioned companies have a way to go to achieve that very goal too.

In addition to discussions about building a music service, HP also is seeking to extend relations with labels in order to have better access to high-profile artists that can help promote their products, sources say.

Recently, HP has had high profile commercial endorsement from Alicia Keys talking about how her music sounds like it was meant to on Hewlett-Packard equipment.

Questions? Comments? Let us know: @billboardbiz

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