Have you heard about OnLive? It’s a “cloud-based” video game system. Which essentially means it relies on a cluster of servers to do all CPU and GPU processing of game data then streams a compressed video back to the gamers TV and/or computer. When the user clicks on the keyboard or controller his or her data is sent back to the “cloud”, and so forth and so on.

I was just reading one of the many blog debates (this one on ETC) centered around pirating music. Nothing new, just restating the, “How am I supposed to find the good stuff? Radio? Blogs? MySpace? I need to steal everything first, then pay for it when I decide I like it” argument against, “Downloading without the consent of the artist is stealing.” I respect both views. Downloading (especially BitTorrent) have opened up avenues of music exploration previously unattainable. Yet, it’s a tough road for an artist that never makes money from creating music. What does this have to do with OnLive?

What if all music was located on a cluster of servers (think of the best torrent site ever) and could only be streamed (not downloaded) to your wi-fi enabled iPod, car stereo, or home computer? What’s the use of pirating something when you can access it at any time with any device? Especially if the quality was in the magically blessed 192KBPS? Not to mention, no more worrying about storage space for your 2TB collection. The server handles all of it. As far as price. It could be based on an all-you-can-eat subscription system (Like OnLive) or a per song/album (or better yet, both). Wrap it in Voluntary Collective Licensing along with Creative Commons copyrights and you may have a winning idea. You could even combine Pandora/Last.fm/social media functionality into the system.

The benefits of a system like this are many. To start with, you never have to worry about buying an iPod with enough space to carry your music collection. Storage space would matter little, yet functionality would be paramount. No more hard drive failure worries. Your data would always be “off site.” With added social media functionality it would be possible to discover music based entirely on your personal preferences.

The negatives are mainly technical. Wi-fi isn’t available everywhere (and certainly isn’t available on every device that can play music). Even when it is available, fast broadband wi-fi can often be buggy, sparse, or just downright broken. Sometimes it’s necessary to burn a CD to go “off the grid.” How would you accomplish that? Anything but DRM!