Friday, October 23, 2009

Biggest Music Business News of 2009: Welcome Google!

I think this week's news about Google launching a music service, “OneBox,” could well be the biggest music business news of 2009. Considering the number of partnerships that were made, I can’t believe that the rumors stayed under wraps for this long while everybody was caught up in Facebook & Spotify talk over the last couple months.

Some people are speculating that Google will merely introduce their version of Yahoo!'s music service that launched over a year ago. I think Google has a much greater chance to succeed considering their growth and all of Yahoo!'s distractions. The mere fact that the most popular site on the internet is finally becoming directly involved in the music space is a BIG deal (Google-owned YouTube has become their indirect entry over time).

I personally think Google is asking for more trouble than they’re looking for by jumping into the complicated music streaming space, but I am ecstatic to see them make a splash as it will open the doors for greater competition and more opportunities. As Paul Bonanos noted in his GigaOm writeup, “Google might buy rather than build.” I think he nailed it and that enhances the future prospects for companies like mine (Rank ‘em) and many more.

Google has been the default music search engine for a while now. It makes complete sense for them to get involved in the space, but it won’t happen without some difficulties. The major record labels have been holding on to the outdated 20th Century business model, and they have made unreasonable (and few) concessions in royalty rates to make many music startups (especailly those focused built upon streaming) viable businesses.

Google understands the Freemium model as well as anybody, and they will have a strong impact on the rest of the industry. I feel confident that the labels will change their ways soon enough, and iTunes won’t be able to justify the silly $1.29 price point for digital downloads for much longer. Music is moving towards FREE (I personally believe the ideal price point is $.25, but I’ll discuss that in another writeup), and I have high hopes that the 95% of all music consumed that is not paid for will trend significantly downward. Overall, I think it’s great to see Google (and Facebook) jumping into the exciting digital music revolution, and the music business is surely looking up!


Paul Freet said...

Google is offering nothing new in my opinion. Playing songs in a google search result is an absurd way to interact with music. What are they thinking? Am I missing something?

BTW, music already is Free. The plastic disk manufacturers just don't get that yet.

Adam Wexler said...

Thanks for reading through and putting in your $.02, Paul. I agree that playing songs via Google is a bit absurd, but I think the average joe isn't even aware of the numerous free streaming destinations available online. I think this new option will focus on the 30yo+ demographic who use google as one of their only stops during their internet browsing sessions (I'd say you don't fall into that category).

Google is out for world domination, and I've been waiting for them to venture into the music space. I wouldn't be surprised if there's much more to come in the future...and I wouldn't be surprised if it came by way of acquisitions ;)