Google horns in on music streaming market

Simon Dyson/Informa Telecoms and Media
20 May 2013

What’s happened?

Google has launched a music-subscription service to complement the sale of music downloads from Google Play.

The strangely titled Google Play Music All Access will go up against the likes of Spotify, Rdio, Rhapsody and Xbox Music in the US, with overseas rollouts expected soon.

There is no advertising-supported tier, and a monthly subscription costs $9.99. An introductory price of $7.99 is in place until the end of June.

Like its rivals, All Access offers curated playlists and suggested music-discovery options. All Access ties in with Google’s music-locker service, which provides storage for up to 20,000 tracks owned by a user.

Why does it matter?

Services such as Spotify, Rdio, Rhapsody and Xbox Music will have to contend with another company trying to forge a space in the subscription sector. With Apple set to launch its iRadio service later this year, the streaming sector – in the US at least – is starting to get crowded.

According to the latest RIAA figures, revenues from subscription and streaming services last year totaled $570.8 million, up 58.9% from $359.2 million in 2011. Included in these figures are retail revenues for paid services and wholesale revenues from advertising-supported services. The number of digital subscribers to paid on-demand services totaled 3.4 million at end-2012.

Although the growth rate is impressive, the number of subscribers is not high enough to support all of the services operating in the US in the longer term. Most analysts are expecting some sort of shakeout in the music-subscription sector, where only those services with lots of subscribers or deep pockets will survive.

Google certainly has enough funding for the long haul, but the question is whether it can attract enough users.

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