Google music streaming could dent Spotify growth

Mark Little, consumer analyst at Ovum

SPAIN: Google’s new music streaming service is reportedly expected to launch in the Autumn this year, an event that is sure to cause a major stir in the offices of Spotify and Apple.

If Google can negotiate a deal that embeds the new service in Android and fully leverages other assets most importantly You Tube, then the Internet prime has the potential to take a significant slice of the $5.6bn digital music market as well as make a dent in Spotify and Apple iTunes growth.

Whilst the possibilities are exciting, there are still a few barriers it must work hard to resolve; record labels will be concerned about controlling Google strategically, they won’t want another Apple with significant market power and negotiating advantage, capable of killing off  smaller music players; choices of business model will also be strictly limited to prevent Google undercutting the market with over-generous free services; the mountain view company is still to resolve disagreements with the RIAA regards infringers of music copyright in search rankings; and it remains to be seen how a Google branded subscription service will be viewed by a digital population increasingly wary of the company’s handling of its personal data.

Given the length of past negotiations with Apple and Spotify, the launch of a fully thought through Google music streaming proposition in September might be a little optimistic.