Why Google Doesn't Need Its Own Streaming Music Service


Why Google Doesn't Need Its Own Streaming Music Service

Streaming music is big business. Big enough that Apple just moved into the space with its Apple Music service, joining Pandora, Spotify, Amazon's Prime Music, Rdio, Deezer, Songza and a host of other, even smaller, competitors.

While seemingly in direct competition on some fronts with Apple and Amazon, Google's Play Music product is neglected and unpromoted.

This is telling. Google is notorious for its use of data to analyze whether to be in a business or not and the lack of focus on Play Music suggests that it has done the numbers and does not believe music can help its search business or Android OS.

And that's the bet for big tech companies like Amazon, Apple and Google: Will adding streaming music attract or retain customers?

In Appleā€™s case, its mostly about selling hardware, namely the pricey iPhone and iPad. If people become used to Apple Music, it will make it harder for them to switch to Google's Android, much as iTunes has fulfilled this service in the past. After all, Apple Music replaces iTunes.

Amazon's making the same bet: Its Prime service, which for a yearly fee gives members all sorts of perks such as free shipping, keeps customers chained to its core e-commerce business. While streaming and free shipping aren't related, and Prime surely doesn't make Amazon money from its fee, it keeps people buying and that's its purpose.

Google's Play Music, buried among its raft of products and services, is pretty different. For one, it works with rival iTunes, which seems more of a concession to iPhone users switching to Android than a way to keep people on Android. It also features access to YouTube, which seems to be Google's way of playing the streaming / content game. But at $9.99 a month, it feels like this is an afterthought product, one which Google tries to control losses on, knowing it doesn't actually add a ton of value for most of its customers.

Google Play Music is also an example of the company entering a market and then finding out that it can create few or no advantages. While Google could press on with Play Music, as it surely has the financial resources and userbase to make it something as big as Spotify, its likely a product that's a bit too far outside its strike zone and not quite profitable enough to really interest the company, who's search business is the ultimate high margin cash cow. After all, the streaming industry has no shortage of competition and little to now competitive advantage can be seen in any of the players.

In fact, Google could completely throw in the towel on streaming and allow other players to fill the need. If there's healthy competition on Android for streaming, don't be surprised if Google gets out of the business entirely.

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