Google negotiating for subscription music service to launch in third quarter

Google Play Music desktop notifications

Google has spoken to some of the top music-recording companies about creating a subscription music service similar to Rdio and Spotify, but music industry sources have told The Verge that any launch of such a service is still months away.

Google has specifically talked about a launch of a streaming music service in the third quarter, the sources said today. The Financial Times reported earlier in the day that the launch is "impending."

Regardless of the timing, more than a decade since Rhapsody launched and helped pioneer subscription music services, the sector is white hot. Skeptics dismissed the category with the argument that consumers would always prefer to own their music. But in recent years, Spotify, Deezer, Rhapsody and Rdio have begun to attract large audiences.

Subscription music is white hot

Spotify needed just one year to sign up a million paid subscribers in the US and is now up to five million paying customers worldwide. A foray by Google into subscription music would only lend the fledgling category more credibility — right now there are few if any profitable competitors.

Spokespeople from Google and the top labels declined to comment. Meanwhile, rumors have circulated in the past several months that Apple is preparing its own subscription offering in the form of a web radio service similar to Pandora.

In its story, The Times indicated that Google intends to charge for the service as the company seeks to diversify its revenue streams. The UK-based newspaper noted that 95 percent of Google's sales come from advertising.

Google launched a music service in November 2011 and later merged that into Google Play, the digital marketplace for the company's Android devices. Google also has deals in place with the record labels that enable YouTube users to incorporate popular songs into their homemade video clips. Music videos are some of the most popular fare on Google's user-generated site.

Google is also in talks to renew YouTube's music licenses

Insiders say that Google is also in negotiations with the labels about renewing those licenses.

One sticking point for all these negotiations could be what some in the industry see as Google's "uninspired antipiracy efforts," according to one source. Yesterday, the Recording Industry Association of America, the trade group representing the three largest record labels, issued a report that indicated Google has not made good on a promise to lower the profile of accused pirate sites from its search rankings.

The RIAA said that sites repeatedly flagged for hosting pirated content were still appearing in Google searches for MP3s as much as they were before Google announced the plan. The big music companies have often used licensing negotiations to prod Google into doing more piracy fighting.

Google responded to the RIAA's accusations about its search results by noting the company reacts quickly to any takedown notices.

"We received more than 14 million copyright removal requests for Google Search, quickly removing more than 97% from search results," a Google spokesperson said. "In addition, Google’s growing partnerships and distribution deals with the content industry benefit both creators and users, and generate hundreds of millions of dollars for the industry each year."

The Verge
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