Google talks to Spotify to power music service
Rather than launch it's own digital music service, Google is considering whether to partner with an existing service, including Spotify, to power Google Music. — According to a source with knowledge of the talks, Google has told the labels …
Context & Ripple Effects
Google has been circling digital music since June 2010, when CNET reported a Google music store could launch that fall. What has changed by April 2011 is the shape of the plan: rather than building its own storefront from scratch, Google is reported — per a source with knowledge of the talks — to be weighing whether Spotify or another existing service should power Google Music.
The report also notes Google has been talking directly to the record labels, which suggests the build-versus-partner question is really about licensing: a partner like Spotify arrives with negotiated catalog rights that Google does not yet have on its own. The talks are rumored, not confirmed, so both Google's intent and Spotify's role remain unverified.
First-order effects
- Spotify stands to gain distribution at Android scale without spending to build it, while Google gets a licensed catalog it has so far failed to assemble alone.
- The labels become the swing party: with Google signaling openness to a partner, they can press harder in direct licensing talks knowing Google needs a music answer for its platform.
Second-order effects
- If Google rents rather than builds, other streaming services competing for that same slot lose the single largest potential distribution deal in mobile music, pushing them toward carrier and hardware partnerships of their own.
- A Google-Spotify pairing would pressure Apple to treat streaming or cloud features as table stakes in iTunes rather than a download-store-only model.
Third-order effects
- Platform owners facing expensive content licensing increasingly face the build-or-rent choice, shifting bargaining power toward whoever holds the rights rather than whoever ships the device.
- If the pattern holds, mobile ecosystems converge on bundled subscription media as a default OS-level feature, with independent services surviving mainly as infrastructure inside someone else's platform.
The trend: Mobile platform giants are moving from building their own licensed-media stores to renting existing services as ecosystem features, making rights-holders the gatekeepers of what launches.