Google Announces Streaming Music Service ahead of Apple

NEW YORK | Wednesday, May 15th, 2013 5:46pm EDT

Google on Wednesday launched a music service called Google Play All Access at the Google I/O developer conference.

Google Announces Streaming Music Service 01

With its $9.99/month new music service, Google makes its first move into a space already occupied by such giants as Pandora, Spotify, and possibly, Apple. Photo: Romain Stievenard/Flickr

With Google’s new service, announced at its annual developers’ conference in San Francisco, the internet searching giant has adopted the streaming music business model ahead of its main rival Apple Inc, which is considered to be a pioneer of online music purchases with iTunes.

“All Access” service lets users customize song selections from 22 genres, from Jazz to Indie music, create individual playlists, or listen to a curated, radio-like stream that can be tweaked. Initially the new service will be launched for U.S. users only, with further rolling out to several other countries.

All Access enters the competition in the market for subscription-based, streaming music. Amazon.com Inc and Apple are already included into the list of the Silicon Valley powerhouses sounding out top recording industry executives, according to sources with knowledge of talks.

Pandora is spending freely and racking up losses to expand globally, reports Reuters. Even social media stalwarts Facebook and Twitter are jumping onto the streaming-music bandwagon.

All these giants see a music streaming as crucial to growing their presence in mobile environment. For Google and Apple, it is critical in ensuring users remain loyal to their mobile products.

With its own music service, Google further “locks” consumers into its sphere of products and services, said Chris Silva, an analyst with Altimeter Group.

“They’re trying to sell an ecosystem,” he said. “The more things I’m doing, the more things that tie me to Google services.”

At $9.99 a month, All Access service is costlier than the $3.99 required for Pandora, but on par with Spotify.

Google’s music service includes millions of tracks from Universal Music, Sony Entertainment Group and Warner Music Group, as well as from thousands of independent labels, a Google spokeswoman told reporters.

Some analysts predict that the new service will allow the searching giant to catch-up to offerings from the likes of Spotify, but did not offer anything unique. Forrester analyst James McQuivey said combining the service with video or game content might have made it stand out.

“You don’t dismiss Apple, you don’t dismiss anyone. But that is not the point,” said Rich Tullo, an analyst at Albert Fried & Co. “Pandora is the market share leader in the space and their platform is so disruptive – it’s very hard to disrupt them. When you have 70 million people use it – they are the disruptors.”

Paul Sloan, the executive editor of CNET, who follows the industry, says that he is not sure how well Google will compete.

“It might just sort of be one of those services that never gets traction,” Sloan says. “Right now Google’s various music services and other various things they’ve done like this have not worked well.”

Sloan points to Google’s Play store, where fans download numerous books, films and music, concluding that it’s not as popular as Amazon or iTunes.

But Google-owned YouTube is another matter, Sloan says. It’s by far the most popular way for young people to listen to music. According to Sloan, the Internet giant is working on another streaming service that will be part of YouTube.

“The industry is hoping for YouTube because that has the brand recognition,” he says. “That has the brand recognition, and people already use it as their digital jukebox in the sky.”

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