Google Music Service Is A Serious Threat To Spotify

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Google Inc (NASDAQ:GOOG) is expected to launch its own music subscription service to compete with Spotify, according to Greg Sandoval of the Verge citing unidentified sources familiar with the search engine giant’s plan.

Google Music Service Is A Serious Threat To Spotify

The search engine giant is set to launch its music service at the Google I/O Conference in San Francisco, California on Wednesday, May 15.

According to source in the music industry, Google Inc (NASDAQ:GOOG) obtained separate licensing agreements with Universal Music Group and Sony Music Entertainment for YouTube and Google Play.

In addition, the search engine giant also inked a licensing deal with Warner Music Group, according to a previous report from the Fortune Magazine. The search engine giant plans to offer music subscription services for YouTube users and Google Play, the entertainment platform for the Android operating system. Warner Music received 25 percent of its revenue from streaming music in 2012.

Fortune Magazine obtained its information from unnamed sources in the music industry and from Google Inc (NASDAQ:GOOG) last March. “While we don’t comment on rumor or speculation, there are some content creators that think they would benefit from a subscription revenue stream in addition to ads, so we’re looking at that,”  stated by the spokesperson for YouTube. According to the report, users will be able to listen to the available music in the platform free of charge, but it will also offer a subscription fee for users interested to avail premium features.

People familiar with the plan of Google Inc (NASDAQ:GOOG) believe that its music subscription service is similar with Spotify’s platform, which offers streaming free music and  on-demand songs on PC’s and mobile devices.  At present, Spotify has 24 million active users, and around six million users are paying $5 to $10 per month for its premium music.

On the other hand, Apple Inc. (NASDAQ:AAPL) is planning to launch its internet radio service known as the iRadio, which aims to compete with Pandora Media Inc (NYSE:P). Apple is expected to launch the iRadio later than expected because the tech giant is having difficulty with licensing negotiations.

A related report from the New York Times said that Google Inc (NASDAQ:GOOG) will not offer a free tier for its music subscription services. Sources briefed by the search engine regarding the service cited the subscription fee is around $10 monthly.

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