Digital Top Stories

Google negotiating licenses for streaming service, says FT

By | Published on Monday 25 February 2013


Google is in talks with the majors seeking licenses to launch its own streaming music service, according to the Financial Times. The web giant plans to launch a service to compete with the likes of Spotify later this year, copying the Swedish digital player’s model of offering both ad-funded free and subscription-based premium options.

There has been talk of Google launching a “killer music service” for years, of course, with sources at the web firm originally talking up an in-development Google platform that would take on Apple’s dominance of the download market.

With it sitting on such great data about the likes and preferences of its hundreds of millions of users worldwide, there are reasons why Google could be the company to shake up the digital music market, though all of its music products to date have been pretty lacklustre; it’s most recent innovation being the Google Play download store and digital locker service, the closest the firm has got to directly competing with iTunes. It’s certainly not done much to bother Apple to date.

Though, while Google-branded music services have all been rather rubbish so far, the web firm is actually already sitting on the biggest, most popular and most lucrative streaming music service on the internet in the form of YouTube, even if an ever increasing amount of music consumption on the company’s video site is actually hosted by the music industry’s own VEVO platform.

YouTube, of course, doesn’t have the functionality or the catalogue of its audio-streaming rivals, it not being specifically designed for music, and being generally (though not exclusively) limited to those tracks that come with a promo video. Though plenty of research suggests that for the youth demographic those limitations aren’t all that off-putting (nor is the variable sound quality of recordings), especially while the service is free, very searchable and easily sharable.

The new Google streaming service would, it seems, be a separate product to YouTube, more closely aligned to the existing Google Play platform, and really designed with the Google Android smartphone and tablet operating system in mind, though obviously a desktop version would be required to assure mainstream appeal.

Given many still believe the future of online music is very much mobile-centric, the continued growth of the Android eco-system makes Google seem ever more like an obvious major player in the digital music market. And especially in the emerging streaming space, where Apple doesn’t dominate (yet – rumours of an iTunes streaming service persist), and where no one player can really claim global dominance, especially if Pandora and Spotify-style services are all considered to be part of the same market.

And Google would have the resources to enable a major play in the freemium streaming domain, both in terms of cash and, perhaps more importantly, ad sales power. Of course Google hasn’t, in the main, been all that keen to put its own money on the line when it comes to developing content-services, whereas most start-up streaming firms are still operating at a loss. Though on the YouTube side the web giant has starting spending a little more, and with such a well established in-house ad network to call on, Google’s required investment would likely be less than for almost any other rival.

All of which means the launch of any Google streaming service could be very interesting indeed, and possibly a bigger game-changer than any Apple plans to launch a Pandora rival. All the company needs now is licences from the record labels and music publishers.

The big music companies will likely use any licensing negotiations to bang on some more about their pet gripe of the moment – the web giant’s perceived inaction in stopping music pirates from performing well in Google searches – though the labels have long had a love/hate relationship with the web firm, and that hasn’t stopped lucrative partnerships via YouTube and VEVO, nor the licensing of the albeit disappointing Google Play download store.