Google to launch music download service - MySpace heading for the deadpool - Facebook

The Seeker of Good Songs

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Google to launch music download service - MySpace heading for the deadpool - Facebook in love with Spotify


The Wall Street Journal has been able getting some new details about the long-rumored Google music service. Google is according to the newspaper planning to launch a download service first — tied to the Google search engine — and then in a later stade launch an online 'cloud-based' subscription service. The latter one should be functional by 2011. This cloud-based subscription service would stream directly to Android-based devices. The plans show that Apple's upcoming cloud service using the Lala engineering is not the only cloud service that will be launched soon.

In October 2009, Google launched its music discovery search features (in a partnership between Google, MySpace, Lala, and several others). Calling it a success is hardly the correct term. Labels have noticed that none of the mentioned partners generated enough revenue to even consider it to be important let alone unmissable. The total sales from this service didn't even reach 2% of the total download / streaming music market.

We decided diving a bit into the matter and sketch the future of the music download/streaming services which will also decide if the electro scene will be able to survive the current market malaise. There is a lot at stake.
Android vs iPhone, iPod, ...
The new plan looks a bit more solid and worked out though (and reminds of what Google has tried to do in China before it pulled out of that market for some dubious yet marketingfriendly reasons) and will create a serious competitive service for Apple and all other suppliers of cloud-based music services. But if you think that search will drive the sales, then you are very wrong. Music discovery is not what a Google user is and will be using the search engine for.

Instead it looks like it that Google counts on its mobile operating system Android to push sales. Not a stupid intake because unlike Apple with its 'iDevices', Google until shortly had no mobile devices that it could rely on in order to push a music (download) service. This all changed with the rather high penetration of Android nowadays, literally the future chicken with the golden eggs.

At Google I/O, Google already showed off technology that will allow Android users to stream music off of their desktop computers right on to their phones. It was a hint at what a cloud-based subscription service may look have on offer. So far Android does support direct over-the-air purchasing from the Amazon MP3 store but it's a far cry from the total integration of iTunes with all of its 'iDevices'. Google's download/streaming service will alter this image quite a lot.

Sure thing is that the new service could and will knibble on Appel's share in the total music market where it accounts for 25% of the total music sales (CD, download, ...) and up to 69 % share of the overall digital music arena. Note that Amazon.com holds merely 8 percent, a number which is consistent with the sales figures from various labels that Side-Line could look into.

Bye bye Myspace
It's also becoming quite clear that Google has combined data around its (music) search with knowledge of what searchers are streaming on Google, to build up its own service of the ground. The biggest victim? Not Apple which purchased Lala, but MySpace Music. After this extra knock MySpace (Music) - who?- sees its position becoming weaker and weaker by the minute. The site which counted on Google to revive its brand will no longer be included in the new Google service as it looks now. Being the only item in the MySpace framework that still performed a bit, MySpace Music is heading for the deadpool.

News Corp can start thinking of stopping the site (which still burns hundred of millions of dollars per year without making any substantial profit) alltogether. Selling it won't be an option we fear; the site is polluted by hundred thousands if not millions of of dead and/or spam profiles. On top it must be one of the most userunfriendly social network websites ever built and an absolute horror for marketeers to work on. News Corp has so far shown a total lack of vision and strategy and even kicked out the team that could have made the difference (including building up the site from scratch again). Conclusion: It's becoming increasingly clear that Myspace has turned out to be the web’s biggest joke. From hero to zero in no time.

In 2006 already Side-Line wrote that the business model and usability of the website would mean the end for the site once the profitable one billion dollar deal with Google would have ran its course. It took a bit longer than we had thought but its a sure thing now.

The whole (expected) shake-up in musicland is good news for labels who so far have seen their revenue scattered over more than 300 services worldwide whereas most of the revenue is primarily generated by 7 parties: iTunes, Amazon MP3, MediaNet Digital, eMusic, Napster, 24-7 Entertainment and yes, surprisingly, the controversial online 'radio' Spotify (despite it being only available in a few countries, excluding the USA if we don't take in account a small group of 30.000 including Facebook founder Mark Zuckerberg). Adding a major player like Google in the mix might only increase the revenue generated online and also mean the shake out of lots of services that are too small to survive.

Where is Facebook?
One would almost forget that there is another 'major' social network active, namely Facebook. So far there is no sign of a music service on Facebook but if we can make a guess, Spotify might be the perfect partner. Facebook members share at fast pace, but don't exactly purchase goods when being on facebook. And Spotify users digest passively and don't buy either. Add both and Facebook might well generate that traffic to Spotify needed to convince the major labels to keep the service up. Howeveroffer a decent income stream for labels being the official Facebook radioplayer/jukebox.

Word has it anyhow that Facebook has been talking with the European startup about a partnership for well over a year. Mark Zuckerberg even posted a Facebook update saying "Spotify is so good". Also, Facebook investor Li Ka-Shing is also a big stockholder in Spotify. And when Spotify recently created a social network inside the Spotify service it was heavily integrated with Facebook Connect features. A coïncidence? We don't think so. Love is in the air for sure. The delayed launch of Spotify in the US might also be explained by ongoing talks with Facebook.

We are pretty sure though that the former iLike management made the biggest mistake in their carreer by turning down Facebook and accept... MySpace's offer! With MySpace being almost in a lethal coma now, and iLike being shut down on Facebook after having been the de facto music application on Facebook for quite some time, even the smallest child will realise that iLike's heritage is over and done as well. Where Facebook gave iLike a preferential treatment on the platform, it looks like it that Spotify might take over that 'spot' quite soon.

The download and streaming market is far from being stabilized, but there are crucial months laying ahead that will decide upon life and death for many players. And the winners will take it all especially if the US government will indeed make work of blocking illegal sites as the Obama administration now clearly intends to shut down Internet trafficking in pirated movies and music. They plan to go after foreign-based websites and Web services that infringe intellectual property rights.

from: http://www.side-line.com/news_comments.php?id=44752_0_2_0_C
 
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