Apple Quarterly Earnings Lower Than Expected
Apple Quarterly Earnings Lower Than Expected

Watching the race between Apple and Google to see who launches a cloud-based music service first is kind of like the children's fable of the Tortoise and the Hare. Except they're both Tortoises.

But there are signs that the finish line is in sight.

First, Reuters has a piece saying that Apple has "completed work" on its online music locker service and will beat Google to market, even though label sources have not been told when that might be.

Additionally, Peter Kafka at AllThingsD says Apple actually has deals with two of the four major labels. He also says that Apple is planning a "scan and match" locker service, which means it would store one copy of each song in a central server, and let anyone who purchased that song on iTunes stream it to any device. This is the model that Lala championed, the company Apple bought in late 2009.

Still no details on pricing or time. And we've not yet been able to independently confirm any of this. But it sounds reasonable and in line with what we've been expecting from Apple all along.

As for Google, the Reuters story speculates that the company keeps changing its plans and that complicates the licensing talks. Google also has completed work on its music service, as reports surfaced a few weeks ago that employees are already testing it internally and there have been leaks of the app in various outlets. So it's fair to say both Google and Apple have completed work on their music locker services, and all that remains is the licensing element.

The story raises the possibility that the April 1 transition of co-founder Larry Page to CEO may have some impact, as his assumption of the role was quickly followed by a top management shakeup. But that seems unlikely. That management shakeup did more to strengthen the team at Google building the service rather than cast it into doubt. As we previously reported, Google's Android unit chief Andy Rubin has to date been leading both the product strategy and label negotiations on the music service. In the days after Page became CEO, Rubin was promoted to senior VP reporting directly to Page. So it's hard to see how that changes things.

(Also, this is the same Reuters reporter who in February assured us all that a deal between Universal Music Group and Spotify was "weeks away.")

Frankly, who launches first is not nearly as interesting as what they ultimately launch with. A "scan and match" service from Apple would be a much easier system to use than any of today's upload-and-store models. It simply takes fewer steps. Then there's the element of music sharing, recommending, and so on. Both Google or Apple could unveil a music locker service in line with what Amazon recently launched today if they felt like it. What's holding things up are the additional features they wish to provide that have some element of licensing necessity involved in the process. The digital music future remains a marathon, not a sprint.

Questions? Comments? Let us know: @billboardbiz

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