Google (Nasdaq: GOOG) is apparently ready to dive into the digital music realm, according to TechCrunch. Multiple sources are telling the tech blog that the launch of Google Audio is imminent.
Will this be yet another streaming service, or a more ambitious ad-supported download offering?
It may very well be neither. Google partnered with Top100.cn to offer a free ad-based music service in China last year. We can't draw parallels to that offering, though, because China is a country where 99% of the music consumption is believed to be pirated. The labels were more than willing to cave in to a revenue-sharing option, because it was better than what they were getting from music searches through sites like Baidu (Nasdaq: BIDU) and Sohu.com's (Nasdaq: SOHU) Sogou: Nothing!
There is just no way that an ad-based downloading service can deliver the kind of revenue that the major labels receive through Apple's (Nasdaq: AAPL) iTunes or premium subscription providers such as Best Buy's (NYSE: BBY) Napster or RealNetworks' (Nasdaq: RNWK) Rhapsody.
The opportunity here may rest in attracting unsigned and indie-label artists -- similar to the old MP3.com site -- but that would only address the supply side of the equation.
Moving beyond the stream?
It bears pointing out that Google has already been wheeling and dealing with the major labels, brokering revenue-sharing deals with many of them through its popular YouTube video-sharing site. However, those are streams. Google has a tall order if it expects labels to sign off on free -- or even discounted -- music downloads, since the music makers would be all but kissing digital sales goodbye.
I also think the Google Audio name is important. Why not Google Music? Clearly, this will be about more than prerecorded music, if it ever does materialize. Will its Google Books digitization efforts also be transcribing out-of-print and public domain texts into audiobooks? If so, Amazon.com (Nasdaq: AMZN) may not take this lying down, as a retailer of books, digital books, and MP3 audiobooks through Audible.com.
For now, let's let this crispy rumor simmer until it's official. One has to think that Google won't show up late to the game with a poor man's Pandora. Not everything that Google touches is gold -- or even ambitious -- but it's usually well-thought-out and strategically savvy.
Until the details come in for a sound check, it's safe to mute this chatter.
What would you like to see in Google Audio? Name your tune in the comment box below.
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