Google Music Open For Business
November 17, 2011

Google Music Open For Business

Internet search giant Google launched its new online music store during a flashy media event in Hollywood on Wednesday, vying to take the lead away from Apple and Amazon in audio entertainment distribution, despite not having one of the music industry´s leading record labels -- Warner Bros. -- on its side.

Google Music will offer more than 13 million songs and be integrated with Android Market, the company´s  online store for smartphone apps. Google Music will allow users to access their music from various Internet-connected devices and easily share content with friends.

Google co-founder and CEO Larry Page has been pushing to get Google into markets that have been long dominated by rivals such as Facebook, Apple and Amazon.

Despite not securing Warner Bros. Music, Google has struck deals with Universal Music, EMI and Sony´s music label. It has also secured deals with independent labels like Matador. While some of the 13 million songs will be offered free, others will cost between .69 cents and $1.29.

The Google Music service is only available in the US until the company can complete deals with record labels to allow it to sell songs outside the country. Google Music will feature exclusive content from the Rolling Stones, Coldplay, Busta Rhymes, Shakira, Pearl Jam and Dave Matthews Band.

Without Warner Bros on its side, however, Google will not have such famous artists as Led Zeppelin and Prince, and could find itself left out in the cold while other top MP3 music sellers keep their fire burning.

“They´ve got to get that [music] catalog filled pretty quickly,” Mike McGuire, an analyst at industry research firm Gartner, told Reuters. “It´s a launch, but it´s kind of like a work-in-progress.”

Analysts don´t believe a music service is going to boost Google´s revenue much. However, they do say the search company needs to be in the market to ensure that its Android-based mobile efforts remain competitive and can match similar offerings that others have.

Android is the top smartphone operating system in the world, but without a music service, Android-based smartphones may not be as attractive to consumers seeking a product that offers a much better media experience.

Apple and Amazon, two companies that offer MP3s, will pose the biggest challenge on that level.

“Google can´t just meet the bar set by Apple and Amazon,” Michael Gartenberg, an analyst at Gartner, told The Telegraph. “They're going to need to raise the bar and come up with some sort of differentiation,” he said.

Even though Google faces a battle to secure a share of the market, analysts said that the offering could strengthen its hand in the much bigger battle for mobile users. Google´s Android OS has a 53 percent smartphone market share last quarter, compared with only 15 percent for Apple. With such a strong hand in the smartphone market, Google could be a force to reckon with if it plays its cards right in the MP3 market.

Music is regarded as a key ingredient as Google, Apple, Amazon and Facebook continue to launch competitive features and services to give users little or no reason to leave. Facebook launched a music option last month that users can use to tap services like Spotify. Apple also just recently launched its iTunes Match service, which allows any user of an iOS device to download a copy of any of the songs they already own in their music collection on a registered computer to one of those devices. The iTunes Match service is only available in the US.

While Google offers a service similar to iTunes Match, the Apple service does not require users to upload their songs directly; the iTunes Match system notes what songs exist on the computer and finds a match from the iTunes Music Store.

Google´s music service will cost $25 per year. Jamie Rosenberg, Google´s director of digital content for Android, said: “Other cloud music services think you have to pay to listen to music you already own. We don´t.”

Google will also offer free cloud storage for up to 20,000 songs, though customers have to physically upload them, unlike iTunes Match.

To help the company get the new music store up and running, the search giant said it will offer one free song download every day. Google is also hoping that its service can attract users by integrating it with Google+, the company´s social networking platform launched earlier this year.

“Recommendations from friends are the single most important way that people discover music and we think that this feature has the potential to really transform purchasing behavior,” said Zahavah Levine, Google's director of content partnerships for Android, at Wednesday's event.

Google´s plan to bring legitimately sold music to people in new ways can only be good for the market as a whole, Mark Piibe, EMI´s executive vice president of global business development, told the Guardian.

BGC Partners analyst Colin Gillis said companies like Google and Apple need a way to keep users locked in to their respective mobile services. “Everyone is using music and media as a jail. Ultimately, this stuff is going to be stored in the cloud and it becomes harder and harder to switch systems.”

By linking music purchases to an account on an Apple or Google device, the companies create a barrier for users to shift to another device — although both companies allow users to download songs to their own computers, which can then be uploaded or linked to in the other´s service.

In reference to its new music service, Google said in a blog post on its site: “You can purchase individual songs or entire albums right from your computer or your Android device and they´ll be added instantly to your Google Music library, and accessible anywhere.”

Google also aims to make it easy for artists to distribute their own music on Google Music. “Any artist who has all the necessary rights can distribute his or her own music on our platform, and use the artist hub interface to build an artist page, upload original tracks, set prices and sell content directly to fans — essentially becoming the manager of their own far-reaching music store,” it said.

Google Music will work on Android devices running version 2.2 or above.


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