Google formally entered the digital music streaming market today with the launch of "Google Play Music All Access." Having recently secured licensing deals with Universal, Sony, and Warner, the service will provide streaming access to millions of songs. The service will include one free month, after which it will cost $9.99 a month, or $7.99 a month if users sign up before June 30th. Google Play Music All Access seeks to differentiate itself from other streaming services by providing users with easy ways of creating playlists, creating online radio stations and recommending music based on user preferences.
Google's launch of this service puts them ahead of main competitor Apple, which is still negotiating with music labels in a bid to get into the streaming business. Streaming is a fast-growing market, with hundreds of millions of users worldwide spread across several main providers. Spotify, which launched 5 years ago internationally and in 2011 in the United States is currently the streaming service to beat in the market. It has 24 million active users, 6 million of which are paid subscribers, according to The Huffington Post.
While Spotify allows users to listen for free by including ads, Google Play Music All Access will only allow subscribers to stream its music. The advantage Google has in this market however, is the Android OS, which is used on about 900 million mobile devices, according to The Guardian's coverage of the announcement. The integration of this streaming service into the OS will mean the opportunity to directly market to and contact hundreds of millions of users worldwide, which is of course an enormous amount of potential users.
The problem that Google faces in the streaming service market is the same that all streaming services are currently facing, which is that revenues are not high enough to adequately cover the high costs of licensing and royalty payments. Google, however, has enough money behind it that they could be willing to take a loss for their streaming service if it means mobile usage spreading even further and seeing even more revenue from that.
