Battle of The Brands: ‘Google Music’ Takes on iTunes

Nov 17, 2011 1:27pm

ht google music nt 111117 wblog Battle of The Brands: Google Music Takes on iTunes
Google has launched a new music service to take on iTunes, MySpace, and Amazon in the battle for your digital download dollar.

Called simply “Google Music,” the product was designed to chip away at competitors’ base markets. Songs — 13 million eventually, eight million today — will be available for download at costs similar to iTunes. Artists, for a $25 fee, will be able to start their own pages, with free streaming music, much like they currently do on MySpace.

Downloads will be stored in the user’s “Music Manager,” which Google says will be compatible with an iTunes library.

While there is little doubt the new service will make an instant impact on the market, there is some skepticism among analysts about its long-term viability.

“Google has a history of both underfunding their efforts and not completing them neither of which bodes well for Google against Apple here as Apple typically doesn’t make either mistake,” said Rob Enderle, head tech analyst at his Enderle group. “It has, historically, been very difficult to displace Apple in a market they have already taken.”

In a bid to lure away Apple’s famously loyal fan base, Google has put 20,000 songs online for free download right away. Artists including The Rolling Stones, Coldplay, Pearl Jam, Busta Rhymes (who was in the room for yesterday’s announcement), Dave Matthews Band, and Shakira have all gone in on the game and made available live albums.

Sony Music, Universal and its EMI division, among other, smaller labels are bringing their considerable back catalogs to the project. Missing still is Warner, meaning no chance, for the time being, to hear or download artists like Snoop Dogg and Wiz Khalifa.

The new service should also boost Android mobile, Google’s answer to the iPhone. While Apple insists on wedding their software to the actual phone, Google has outsourced handset production. For that reason, there are currently, according to Google, 200 million Android users. That’s about a 50 percent market share. The iPhone, despite its pop culture cache, has just a 15 percent share, as reported by the AP and research firm Gartner.

But volume doesn’t guarantee profits.

“Android currently outsells Apple but there isn’t a lot of consistency in the installed base with surprisingly few products on current versions of Google’s platform,” Enderle told ABC News. “This makes it difficult to assure the kind of consistent experience Apple offers. I’n addition, when we move from sales to profits, Apple is massively more profitable with their devices than Google is, which allows them to spend more developing and promoting them.”

In a jab at Facebook, which has entered the digital music arena with its partnership with Spotify, Google will also allow users of Google+, the company’s embattled social networking venture, to get a free play of any song or album purchased by someone in their “circles.”

“[Google Music] is likely to be seen as unfinished initially given Google’s unfortunate history with new products, but it is likely to improve sharply over time and Google can afford to carry this a long time,” Enderle said.

 

 

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