Google set to enter the music streaming business

New service said to resemble Spotify, but will not offer free ad-supported version

Technology trends and news by Steven Loeb
May 15, 2013
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The online music space is about to get even more crowded, if you can believe it.

Google is set to launch a new subcription music-streaming service at its I/O developers conference, which starts Wednesday, according to a report in the Wall Street Journal Tuesday.

The company has already signed licensing deals with several big studios, including Universal Music Group, Sony Music Entertainment and Warner Music Group. Google will be able to allow its users to have unlimited access to certain libraries of their songs for a fee, according to sources.

The new streaming service, which is said to resemble Spotify, will compliment Google's existing music service, which launched in 2011, but only allows users to purchase individual songs or albums.

While Spotify charges its users a $9.99 monthly fee, it also offers an free, ad-supported version. While there is no word at this time what Google plans to charge for the subcription fee, the new service will not include a free version, according to a report in the New York Times.

A very crowded space

If these rumors are true, Google is going to have plenty of competition. Music streaming is a space that many companies are getting into. On top of services like Pandora and Spotify, Google is going to have to contend with Microsoft, Apple, Nokia and even Twitter.

In September of 2012, Nokia launched a free music streaming service available for customers who own a Lumia handset. Users are encouraged make their own playlists, using the Create feature, which will give them access to millions of songs in Nokia’s MP3 store. When a user chooses an artist or a song, The Echo Nest builds a station around that artist, generating a playlist.

In addition to the generated playlists, Nokia Music app also features over 150 playlists, including some created by well-known artists, including Lana Del Rey, Lady Gaga and Rihanna. 

Nokia Music also offers the Gig Finder feature, which customers can use to find concerts and shows based on their location. 

Then, in October, Microsoft unveiled Xbox Music, which was launched first on the Xbox console, then onto Windows 8 when it debuted on October 26.

Like Spotify, Xbox Music offers free on demand streaming access to its 30-million catalog of songs in the Xbox Music Store, where users can buy single tracks or entire albums.

Xbox Music also has a feature called Smart DJ, which works very much like Pandora, in that it allows users to create instant playlists based on their favorite artists or songs.

Apple is also getting into the game with the unofficially dubbed "iRadio" which is expected to be similar to Pandora, with some slight differences, such as more on-demand features, which could make it competitive with not just Pandora, but Spotify and Rdio as well. 

In April, it was reported that Apple was expected to sign its first licensing agreement with Universal Music Group. Universal Music Group and Warner Music were also expected to sign with Apple.

Even Twitter has gotten into the game, with its #music app, which debuted in April. The app helps users find music to listen to through Twitter.

The songs on Twitter #music come from three sources: iTunes, Spotify or Rdio. Users get a default preview in iTunes, and then subscribers of Rdio and Spotify will be able to log in to their accounts to hear the full track. 

Meanwhile, Pandora recently hit 200 million users, doubling its userbase in two years. And Spotify has more than 24 million active users and over six million paid subscribers. Since its launch in 2008, Spotify says it’s driven more than $500 million to rights holders and expects to drive another $500 million in 2013.

With competition like that, it is hard to see how Google really thinks it is going to really be able to compete in the space.

Google could not be reached for comment. 

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