Google Said to Be Planning an MP3 Store
Five months after it introduced a cloud music service with limited capabilities, Google is in negotiations with the major record labels to expand that service and also open an MP3 store that would compete with Apple and Amazon.
Context & Ripple Effects
Google has been circling licensed music for years: Techdirt questioned the legal footing of its early music ambitions back in December 2005 (Google Gets Its Groove On), a 2010 report said a music store could launch that fall but never did, and in April 2011 Google was reported to be in talks with Spotify about powering its service. In May it shipped a cloud music locker instead — storage without a store, because no label licenses were attached.
The New York Times now reports, per sources, that Google is negotiating with the major record labels both to flesh out that limited cloud service and to open an MP3 store that would put it directly against Apple's iTunes and Amazon's MP3 business. The claim is unconfirmed, but it would complete the piece Google has been missing since 2005: licensed downloads tied to Android's reach.
First-order effects
- If the label deals close, Google's Music Beta users move from a license-free locker to a full purchase-and-download storefront, giving Android a native answer to iTunes at the point of sale.
- Apple and Amazon would face a third major-label-backed MP3 retailer for the first time, one distributed through an operating system rather than a standalone store.
Second-order effects
- Simultaneous negotiations with three big retailers hand the major labels leverage over pricing and download-locking terms, pressuring Amazon's lock-free MP3 positioning and Apple's uniform pricing.
- Android handset makers and carriers gain a preinstalled music purchase flow to bundle into devices, raising the baseline media experience every rival phone OS must match.
Third-order effects
- Music retail consolidates around whoever controls the device platform, with download stores serving less as profit centers than as glue binding users to a mobile ecosystem.
- A Google storefront built on negotiated label licenses would establish the rights framework any future licensed offering — streaming included — would have to clear, making these talks the template for what comes after downloads.
The trend: Licensed digital music is shifting from standalone stores like iTunes toward retail embedded in mobile operating systems, with the record labels' licensing decisions setting which platforms can compete.