Google+ Social Network to Play Big Role in Company's Music Store: Sources
Google+ Social Network to Play Big Role in Company's Music Store: Sources

Google's music-download store could launch within weeks, as several media reports have said, but if it does, it would not be a fully formed product with the involvement of all four major labels, sources tell Billboard.biz. But regardless of the specific launch date, Google wants to build sales and potential customers by leveraging its budding social network, Google+.

The company aims to give its Google Music users the ability to share music through the Google+ social network, a source close to the negotiations told Billboard.biz. That depiction jibes with reports at the Wall Street Journal that says Google Music will sell songs recommend to them by Google+ and allow one free listen. An earlier report at Business Insider said the company aims to allow song sharing "on a limited basis" after purchase.

Social networking has turned out to be a key battleground for market share and overall growth in digital music. Facebook has already partnered with streaming services - ranging from Spotify to iHeartRadio - to include automatically include users' activity in their news feeds. Apple and Amazon already have MP3 stores, but lack the kind of social integration that Google has readily available.


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But if Google's download store launches in the coming weeks, it will probably not have the involvement from all record labels, sources told Billboard.biz. The fact that YouTube's new Merch Store, a direct-to-fan storefront integrated into artist's YouTube channels, is launching with iTunes and Amazon MP3 as partners is a signal that a Google MP3 store is likely to have holes in its catalog. To launch with a partial catalog would stand in stark contrast to Apple's history of launching a music product when at least all four major labels are on board. Subscription services Spotify, Mog and Rdio also launched with the catalogs of all four majors.

Google faces two distinct challenges in creating a beachhead in digital music. One is the company's removal of links to infringing content in its search results; Google has taken steps to limit such links, but sources tell Billboard the matter is still a concern. The other is the precedent set by Apple to charge $24.99 for iTunes Match. Google does not want to charge for its storage service, according to Billboard.biz sources and media reports. This combination of Google's proximity to piracy and its unwillingness to charge for storage is likely to stand in the way of successful negotiations with some rights owners. For a recording industry worried that Google helps enable and legitimize music piracy, the two points are significant leverage points.

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In addition, Google must overcome a track record of middling success at ecommerce: 97 percent of the company's $7.3 billion third-quarter revenue came from advertising. That leaves about $220 million generated - 3 percent of $7.3 billion - generated from non-advertising sources such as apps, ebooks and video rentals at the Android Market.

In other words, Google's revenue is business-to-business in nature. Apple and Amazon, who have the two leading music download stores, have a better track record in creating successful ecommerce platforms in partnership with rights owners.