The Wall Street Journal reported that online advertising giant, Google is in deep negotiations with major music labels regarding its planned music store opening later this year. Sources familiar to these negotiations said Google is also scheduled to open a subscription-base music service on 2011. Actual release date of the Google Online Store was not revealed but we’re sure to watch out for it. The company has made attractive proposals to the music industry leaders but up to now no agreements have been signed.
The Future of Online Music Might be Google-branded
Google wants to start a music store tied to its industry-leading search engine. Every time someone search for anything about Justine Bieber, lyrics, videos, songs, or gossip, Google will add a direct link to its music store’s catalog of Bieber’ songs. This method is leveraging the company’s industry-leading search engine website that gets almost 500 million page views every day! This is the initial thrust for Google’s planned music web store. Experts say the music industry, especially in the U.S., will benefit from Google’s entry in to music retailing. Major record labels have increasingly been nervous about the near-monopoly hold of Apple’s iTunes on online music distribution. iTunes now accounts for the biggest market share in music sales in America with 28% share. Its total sales have surpassed that of all the revenues gained from physical music CD sales.
No doubt, this entry of Google will further worsen the tension with Apple. Steve Jobs’ company has increasingly been at odds with its former ally since Google released the Android OS in 2008. Android phones are becoming a real threat to the iPhone’s dominance in U.S. smart phone sales especially this year when more Americans bought Android-powered phones. The rising popularity of Android OS is also the target of Google’s music retailing strategy. The next step to their plan is to offer a cloud-based music subscription service next year. Android smart phones will be able to stream music directly into their phones without the need for storing them locally. Paid subscription to streaming music has been very popular in Europe with Spotify raking in millions of profits from eager customers who pay a small monthly fee to access an unlimited number of songs.
Apple bought streaming-music company Lala.com early this year but subsequently shut it down before June 2010. Industry observers say Apple bought the company to acquire its proprietary streaming technology because the iPhone-maker also plans to offer subscription-base music service in the near future. Some wizened U.S. customers are no longer happy about paying $0.99 per song download on iTunes and are now shifting to monthly-subscription services like Pandora.com. It remains to be seen who’s going to deliver first on this premise, will it be Google or Apple?
Via Kokey
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