Mike McGuire

A member of the Gartner Blog Network

Mike McGuire
Research VP
11 years at Gartner
21 years IT industry

Michael McGuire is a research vice president with Gartner's Media Industry Advisory Services. Mr. McGuire covers online music and media distribution, DRM, copyright-related issues, publishing , and how social-networking technology…Read Full Bio

Apple TV Numbers Makes One Think About the Real Opportunity

by Mike McGuire  |  January 26, 2012  |  2 Comments

Apple’s financial results for their fiscal-year 2011 (fourth calendar quarter, 2011) were mind boggling — $46 billion in revenue, net income of $13 billion. They’re officially in uncharted territory, financial performance-wise.  But the number that caught my eye was the disclosure from CEO Tim Cook that the company sold 1 million Apple TVs in the last three months of 2011.

Steve Jobs referred to Apple TV as a “hobby.”  Then, in the “Steve Jobs” biography, he was quoted as saying he’d “cracked the code” on the TV experience.  And for a product that receives precious-little in the way of U.S. or worldwide marketing support (not a lot of TV ads, for example), the company sold one million. So it’s still a hobby, right?

Sure, but think about it. Turning a hobby into a profession is really hard.  And, come to think about it, some hobbies are harder to master than most.   Golf? I hear it’s really difficult to become proficient.   Needlepoint? Learning curve’s a little easier.   Surfing? Takes time on the water to become proficient. Going from that point to being towed into 60-foot waves? Not too many surfers make that step.

Let’s keep those examples in mind and look at Apple’s challenges in the world of TV.  Re-invigorating the music industry? Hard and complex, and ultimately Apple’s innovation, hardware design, and software design and integration carried the day. But the music industry was absolutely desperate for a way to re-monetize itself.  The TV industry – rightsholders in particular – are not in the same dire straits as the music industry circa 2001. 

More important, Apple’s not the same company it was in 2001 when it launched the iPod and it’s not held to the same standards.  I mean, just look at 2011 numbers: revenues $108 billion for the year.  In 2002, about a year after the iPod launch, the company’s yearly revenue was $5.74 billion.

When we think about Apple TV, we have to think beyond the fact that Apple has more than enough industrial design skills, UI design and software chops to create a unique and, let’s  just stipulate now,  good looking TV device.  And beyond those assets lay the complexities and costs of licensing premium content – movies and TV episodes (and entire seasons), not to mention the requirement for live sports that many consumers have when they think of pay-TV offerings.  And that’s when you have to wonder how risk-averse Apple might be when it comes right down to it.  Can they cut through the licensing clutter to create a unique and compelling “TV experience” for consumers?

They have the resources and the brand equity but I wonder how if the risk-reward calculations aren’t still being checked and re-checked.

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Google Music: It is an Online Music Store – Differentiation From Competition? Google+

by Mike McGuire  |  November 16, 2011  |  2 Comments

After a weeks, or so it seemed, of rumors, speculation and innuendo, Google unleashed its online music store.

OK, it doesn’t have Warner Music Group’s catalog but it does have Universal, EMI and Sony. Will Warner eventually come join the Google party? Probably, but they probably won’t need to hurry or anything. 

Google’s upended the advertising world, it’s now a major mobile OS vendor with Android, but don’t expect Google Music to pull away many iTunes or Amazon buyers. And it’s unlikely to put much of a dent in the businesses of any of the online music subscription services e.g. Spotify, Rdio, Rhapsody etc. And Pandora’s off in its own world. (If anything, maybe there will be “buy” buttons from Google’s store that start appearing next to individual songs on Pandora playlists?)

What is it exactly? It’s an online music store. Like iTunes, like Amazon’s MP3 download store only without the Warner catalog. 

What Google’s store has going for it are one potential differentiator and one me-too feature (besides the whole a la carte download store with standard pricing for songs — $.99 or $1.29/song with the odd $.69 song). 

The me-too – a cloud storage service aka the Google Music Beta.  With the cloud service the user can purchase songs from the Google store and have them automatically populated in their cloud account. And users with Android devices and the music application can stream songs to their device (assuming they haven’t already dumped the songs into the device). So . . . neat?   (Note: according to the Google (Is this true for devices that have forked versions of Android like the Nook Tablet and Amazon Fire?)

The real differentiator for Google’s Music store is the potential of Google+ as a way to create a massive set of transaction opportunities.  With somewhere north of 40-million users, Google+ with Google Music, users will be able to post songs purchased from Google Music to their Google+ accounts and visitors will be able to listen to the complete song one time and, if they like them, hit the “buy” button and go straight to the store.  So…that’s a potentially powerful feature.  Enough to siphon off iTunes or Amazon buyers? No, not in the short- or medium term.

One other potential differentiator? The “artists hub” which will enable independent or unsigned artists to directly upload their creations, create an artist page and start selling songs. But unless and until Google Music’s team decides to invest time in curating that collection of unsigned or independent artists – providing reviews, putting these new, independent/unsigned artists in context with the larger, more established artists or genres – then those artists aren’t going to have much more than having cheap shelf space in a very big store. So far, there doesn’t seem to be an obvious way Google Music is doing much to surface that content. (Actually, there is a page called “Antenna” which might be where the independent or unsigned bands will be featured.)

And finally, Google Checkout is the payment system.  The payment capability does work. Will it be as seamless and easy for consumers to spend money as it is on iTunes and Amazon? That remains to be seen. So that’s good. But the bar’s set pretty high by Amazon and iTunes which have, in their own ways, turned the task of getting people to part with their money – repeatedly – into an art form.

So good luck Google Music! You have a week to get to one million paid downloads.

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Subscription Music Services Jockeying for Differentiation: The Fluid Definition of “Free” and Buying Subs

by Mike McGuire  |  October 11, 2011  |  Comments Off

An interesting couple of days in the online subscription music space.  First, we have Rhapsody announcing that it was purchasing the (legal) Napster service which was most recently owned by Best Buy, Inc. (The legal Napster’s history is more tortured than the original file-sharing version. The legal Napster’s gone through multiple owners, none of which seemed able to crack the code to success.  The original version only upended the music industry and, had the music industry bought into the vision of VC Hank Barry, might have moved it forward, but we’ll never know.)

While terms of the deal weren’t disclosed, it seems apparent that the Best Buy iteration of Napster  completely missed the momentum created by the “content-as-app” movement that pushed competitors (Spotify, MOG, Rdio) and near-neighbor competitors (Pandora, Slacker) forward. 

Getting paying subscribers at what one assumes to be a close-out price makes sense for Rhapsody. (No official subscriber numbers are available but some industry estimates put Napster’s subs at somewhere between 175,000-200,000.) Not only are paying subs the objective of any subscriber-based model, we all know that labels, artists and music publishers will always be demanding more. If they don’t see the growth, I believe they’ll be more than happy to see more consolidation of services that aren’t generating subscriber and revenue growth. 

And there’s this whole “free” thing that seems to bedevil these online services.

For online music subscription services, as with any subscription service, the core business challenges are lowering customer acquisition costs and reducing churn.  We’ve seen the industry try “free” trial offers of 14-days, 30 days and, even Rhapsody’s sonsidered longer trials.  (Rhapsody’s maintains a 30-day trial period that let’s “free” users access all the features of the service.)  However, as we all know, it’s only free to the consumers. These services have to pay for every single “free” stream. Period. 

Another recent example of the challenges posed by the freemium model, especially for online music, comes from the spate of news stories (like this one) out of Europe stating that while Spotify’s user base has grown and its revenue to just over $100 million, five times over 2009′s revenue of $18 million, the company generated a $41 million dollar loss. 

Can Facebook integration help?  Perhaps.  At the recent Facebook F8 conference, Spotify, MOG, Rdio and other services announced various partnerships with the social networking giant. They’re all playing the same card here: how to use Facebook’s massive reach and staggering engagement numbers (what was the recent stat, something like half the time U.S. online consumers spend online is with Facebook?) to cheaply acquire new users and then convert those users into paying subscribers. 

What’s really interesting to me is that while each has a slightly different tactic, they’re all playing a variation on the same theme: “free” access to the services – they just don’t tell the user how long that free period lasts. (Except as I mentioned before, Rhapsody’s maintains a 30-day trial period.)

And I think that’s just awesome.  There are free-riders and there are people who want to make a good-faith effort to try a service before throwing down $4.99/month or $9.99/month (if they want access on their smartphone or tablet).  If lowering customer-acquisition costs and reducing churn are the objectives, these services need to be able to turn the dials and adjust the offer to more quickly get rid of the free-riders and get the potential paying customers to make a decision. 

Without some way to get the consumer committed (to paying), no amount of advertising subsidization is going to make the online music model work.  Beyond radio that is.

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Steve Jobs

by Mike McGuire  |  October 6, 2011  |  Comments Off

A few weeks ago, I was asked by a reporter to come up with a list of individuals who had exerted influence over multiple industries and who had initiated global changes to culture.  In short, people who changed the world from their positions as entrepreneurs (we excluded political leaders).

 Henry Ford and Steve Jobs was about as long as the list got.

The depth of Jobs’ and Apple’s influence on computing, media and communications has been quite well documented before and since his return to Apple in 1997.  (Probably the best obituary I’ve seen is the one John Markoff wrote in the New York Times here.) 

What I always liked and admired about Jobs was that aesthetics and pure functionality never got sacrificed for technology or a feature just because the technology or tech-based feature was available.  Everything from the iMac, to the MacBooks and the iPad not only looked cool and functional, they just were . . . logical. Intuitive. And sleek.  There is no wasted space, no funky or clunky lines.   I also really liked Steve’s sense of competition and his absolute sense of showmanship and salesmanship. He was and remains without peer in being able to sell a product, an idea and a vision. But there are plenty of places around to see examples of those innate traits. (I like this one a lot.)

When I consider what Apple products and Jobs have done to (or brought to) the media industry, the approach has been similar. iTunes, the online music store (initially), was brutally simple in terms of business: $.99/song, $9.99 (or maybe more) for an album.  And those were price points that were fiercely resisted by the music industry. Music label execs were quoted as saying the industry was “experimenting” with these price points.  Those same executives were also saying that they would be pleased if iTunes could sell 1 million downloads in its first six months.  I think iTunes managed to do that in its first week of sales.  And remember, the alternatives for the music industry, at the time of iTunes introduction in 2003, were a whole bunch worse. File-trading, initiated by Napster, social-CD-ripping (passing along a CD to friends, ripping it, passing it along to another) were rampant and rapidly devaluing the industry. 

iTunes and iPod (and later the iPhone and iPad) made it cool and compelling to get people to actual pay for music at a time when many industry observers thought it couldn’t be done.  Jobs and Apple delivered something those alternatives couldn’t: an ecosystem that “…just worked.”  By 2011, iTunes boasted more than 250 million credit-card secured accounts of people who were paying for art. (And later applications.)

Steve Jobs and Apple reminded us all that you can change the world (and industries) if you make something people desire because it looks good and it functions as well as it looks. 

 Sounds easy, doesn’t it?  Look around, though, and you see just how hard that really is to pull off one time, let alone do it repeatedly over many years.   And that brings me to what I think is one of the most important aspects of Jobs’ legacy as a CEO/visionary: the ecosystem of Apple employees that work inside and outside of Apple and the approach to innovation that he built into the company’s DNA.

‘dios, Steve.  We’re not going to see the likes of you anytime soon.

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Yahoo News and ABC News Hope to Redefine Online News w/ Partnership

by Mike McGuire  |  October 3, 2011  |  Comments Off

The big news today out of New York is that Yahoo! and ABC News are collaborating on an expansive partnership to blend their respective content streams – ABC’s worldwide network of reporters including well-known anchors such as Katie Couric, George Stephanopoulos and Christiane Amanpour — into a single Web offering for consumers that they claim will reach over 100 million online users.

Execs from both companies noted in briefings ahead of Monday’s announcement that the core of the alliance is close working relationship between the respective staffs at ABC News and Yahoo News. The teams will collaborate on coverage, especially breaking news and major events such as the upcoming 2012 Election cycle. (The two organizations worked together on the recent royal wedding, to cite an early example of the potential of the partnership.) It’s worth noting that while ABC News will become the “premiere news” provider for Yahoo, both companies will maintain their separate online news sites, with each overseeing its own editorial efforts.  ABCnews.com’s audience has grown to 19 million unique visitors/month (August 2011) a 164% gain over August 2010. Interesting to note that for the same time period – August 2010 to August 2011 – Yahoo News’ unique visitors were down 13.3 percent to 60 million uniques.

While there is real potential for some interesting joint efforts, it will be equally interesting to see how the editors of the respective teams manage the inherently competitive nature of individual reporters and editors.  

If today’s announcements are an indication of the level of investment, the two companies have done a bit more than hold a press conference and re-purpose existing content. While it might seem like re-purposing, the move to give ABC’s “Good Morning America” morning news program a dedicated space on Yahoo News’ site (goodmorningamerica.com) is an important acknowledgement of the persistent value of some TV programming in an Internet-centric world.

The alliance will deliver some key exclusive programming including “Newsmakers,” a series of exclusive interviews, a program on tech and science developments, “This Could be Big,” hosted by “Nightline” anchor, Bill Weir. The first of those exclusive pieces of content is an interview ABC’s Stephanopoulos interviewing President Obama that was scheduled to air at 2:35 pm ET. As much as anything else, the alliance indicates Yahoo’s desire to pay off the promise implied in their company tagline, “. . . the world’s premiere digital media company.” Put another way, partnering with a recognized international news organization to leverage the Internet’s reach and 24/7 news cycle, Yahoo is adding an important piece to the foundation of what Ross Levinsohn, Yahoo’s executive vice president of Americas, said earlier this year at an analysts conference was his hope to make Yahoo “…the fifth network.”

Given Yahoo’s investment over the years in its core properties such as Yahoo News, Yahoo Finance and Yahoo Sports, and its development of multiplatform apps, the company has, in theory, definitely got the consumer endpoints covered.

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The Future of Charts and Trying to Figure out What a Facebook Like is Worth

by Mike McGuire  |  September 15, 2011  |  1 Comment

(And other challenges in a socially connected world . . . )

I moderated a panel called “The Future of Charts” at the SFMusicTech conference earlier this week and came away with a stronger sense of how complex the business of music (and media) will become under the influence of social networks and social media.  

Seems straightforward enough, right? Sell x number of CDs, or song downloads and whoever sells the most moves to the top of the charts.  But right now, and for the foreseeable future, it’s very unlikely to be that simple.  And that’s probably going to be a nice problem to have for those folks on the panel which comprised Richard Sussman, of Nielsen, Kyle Bylin, of Billboard, and Alex White, of Next Big Sound.   (Next Big Sound supplies the data for Billboard’s “Social 50” chart.)

What became clear early on during the discussion was that as the music industry (not to mention the rest of media) moves more of its business online, and consumers mix-and-match music/content acquisition modes (download-to-own, pay for access via subscription services), measuring and defining success by merely tracking sales data will only give a partial picture.   Sales performance in terms of songs downloaded, songs streamed or added to playlists on subscription service account will still be the ultimate in terms of judging business value, getting to the top of the (sales) charts is merely the end of a long (and getting longer) trail of increasingly visible/track-able data points that illuminate the forces that lead to a piece of content being successful in the marketplace.

What I find interesting is that while the emphasis on understanding the movement and shifts of influencers and online audiences – are they mobile? are they multitasking while listening/viewing the content? – trying to assess the business value of these is made more complex by the lack of a way to measure the audience’s commitment to the content.  Paying for a CD, a song or album download, or paying a subscription fee for music (or any other media form), those are solid indicators of commitment.

 Indicating an interest in a band by posting a “like” on your Facebook page or, perhaps, Apple’s Ping; a thumbs-up on Pandora, all create measureable data.  The question is a measure of what?  Not to get all existential, but can a “like” on a Facebook page or a “Fan of . . .” be indicated by somebody even though they’ve never bought an album, a ticket to a concert or done more than just stream a couple of videos on Vevo or YouTube?  Of course that can happen, and it probably does. Ultimately, what has to be determined is whether there’s business value in tracking those sorts of what I call shallow commitments to content.

Being able to divine the actionable business intelligence is going to mean some very days ahead for the folks who measure audience and audience behavior.  And I’m sure it’s going to add a whole new sub-specialty to the discussions in and around consumer data and privacy.

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Rdio: will the family pak draw them?

by Mike McGuire  |  August 23, 2011  |  Comments Off

Why hasn’t the subscription model for online music? Sure, its previous incarnation in the first half of the decade was fraught with DRM snafus and, well, none of the services played on the iPod.  But the iPhone and the app economy changed all that with the content-as-app approach e.g. online subscription services with a smartphone or tablet app that can stream songs or cache them in the app for offline listening.

Yet, it’s 2011 and apparently the only online music subscription service to crack 1 million paying subscribers is Spotify (and the vast majority of those are in Europe).  By most forecasts, the download-to-own revenue model will dominate with the subscription model generating the growth opportunity. 

Rdio’s  new family plans are the company’s attempt to extend the value of subscription music by enabling connected families to outfit everybody with a legitimate service, providing a nice cost savings for the family that believes in paying for music (or at least puts up with the idea of paying for music). 

Not a bad move for a couple of reasons.  First, according to Rdio execs, adding a family plan was second only to making an iPad app in terms of the most requested service enhancements.   So listening to your customers is always smart.  Second, it does show a company doing a little something different in terms of acquiring and maintaining users. Third, Rdio’s doing something that few of the other subscription services have done: actually spend some time thinking about the diversity of online audiences and fashioned an offering that appears to be based on some actual user- segmentation work.   Now, given that two subscriptions – enabling two users on an account secured by a single credit card – will cost $17.99/month ($1.99 less than two full monthly subscriptions) — this plan is not going to appeal to online music fans who spends time trying to get music for free.  Then again, who cares about those people?  

However, the app runs on the major smartphone and tablet platforms, giving consumers a decent product selection.  So if it’s a family that believes in paying for music, and doesn’t need to have a bunch of discs or external hard drives to manage, a subscription music model that gives a bit of a discount   might have some appeal.

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File Under: Inevitable (it took way too long but it was inevitable)

by Mike McGuire  |  August 17, 2011  |  1 Comment

Nice rundown on News.com on YouTube (Google) and its efforts to smooth (or smoother) their somewhat fractious relations with content rightsholders. 

In this case, the online video giant’s dualistic role as a music freak’s treasure chest and bane of segments of the music industry settled a suit which included the National Music Publishers Association (NMPA).  Like a number of organziations representing stakeholders in the music industry, the NMPA had filed suit against YouTube, arguing that they had to be able to be compensated for the synchronization rights (rights music publishers control for  how their content is used in videos, movies, broadcast TV shows etc.) when their music was used in content consumers uploaded to YouTube. 

So now, when those slideshows w/ songs, or concert videos etc. , are uploaded, publishers can negotiate synch licenses with YouTube (Google). Terms of the license deals was not disclosed.  These are most likely based on per-song rates common to streaming  music agreements and calculated by the number of complete views of the video or slideshow. 

Since this was part of a series of lawsuits filed in 2007, it only took four years for this agreement. Only. Four. Years. Sigh.

Things to look out for: this is clearly a nice big loose end that was tied off by YouTube (Google).  One has to wonder if it’s a precursor to the ultimate conclusion of the Viacom-YouTube(Google) copyright infringement suit (Google won in the lower courts; Viacom’s vowed to appeal)?

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iTunes in the Clouds

by Mike McGuire  |  June 7, 2011  |  Comments Off

Apple’s announcement on Monday (6/6/11), gave us the company’s take on the notion of what a cloud-based media service can be – one that preserves the value of an a la carte sales model for downloads (in this case) while extending the value of its customers’ investments in iTunes by simplifying the management of their libraries.  The company might also have figured out a way to make some revenue for the music industry from all those years of file-trading and BitTorrenting, not to mention CD ripping.

 Thank iTunes Match for this. This new service, which Apple plans to charge $24.99/year, will add non-iTunes music files to the company’s iTunes in the Cloud application which automatically backs up and synchs iTunes purchased music to all of a user’s devices wirelessly.  What Match does is scan the user’s library and if it finds copies of songs/albums that the iTunes store has licensed for sale, it will replace the user’s previously acquired copy in their iTunes in the Cloud account with a version encoded at 256kbps in the AAC format. (So Apple saves on the costs associated with having to ingest and transcode uploaded content that is, in effect, a dupe if it has a match in the iTunes store’s licensed content.)  But any songs/albums that Match cannot ID and find a licensed version in the iTunes store catalog would be uploaded to the user’s iCloud account and the user can manually add them to various devices.  

This contrasts with the first-to-the-clouds announcements from the online music subscription services and, more specifically, the recent announcements from Amazon and Google touting their cloud music storage lockers and the ability stream the music to a device or a browser app.

  •  The subscription services from companies such as MOG, Rdio, Rhapsody and (in some European countries) Spotify, charge users a monthly fee of $4.99 for broadband-connected PC access and $9.99/month for access to the service via apps for smartphones and tablets. Users either stream to their PCs and connected devices and can also cache content via the application for listening while offline.
  • Amazon gives 5GB/month for free, charges $1/1GB so $20/year for 20GB, $50/year for 50GB, and so on up to 1TB for $1,000/year, but does not count songs or albums purchased from its own MP3 download store against the storage locker’s total.
  • Google has not announced pricing for its Music Beta offering but it is billed as a service that scans the user’s music library, uploads the non-DRM’d files and can stream the content to a browser or smartphone/media tablet application.

Now, what’s interesting about the Amazon and Google offerings is that in the run-up to and the follow-up from their respective launch announcements, both vendors seemed to directly challenge the music labels and publishers. First, Amazon bluntly stated in press statements that it didn’t need to discuss any sort of licensing with the labels. Second, Google, in announcing their service publicly stated that the service wasn’t what they wanted because of contentious licensing discussions with the labels and publishers.

While iTunes in the Cloud is a beta, the announcement on Monday made clear that the company is iTunes users to the cloud in a way that preserves the sell-through download model while and – if stories like this are true — doing something no other company’s figured out how to do: extract some revenue from the millions of users music libraries that contain illicitly obtained music via file-trading software.  While also extracting an additional “tax,” if you will for years of CD ripping (and, yes, I do remember “rip, mix, burn”). 

There are some unanswered questions that I believe will need to be answered between now and when Match is opened up:

  • 1)    What should be consumer expectation that their music collections that aren’t matched by Match with iTunes’ catalog remain protected from the prying eyes of rightsholders’ ttorneys or the lawyers with the Recording Industry Association of America (RIAA) who might want to identify and target files they believe might have been obtained via illicit file-trading application?  Has the music industry decided to focus on the potential long-term revenue from services like Match and ignore the perception that enabling Match and similar programs would, in the eyes of some, mean the labels are forgiving or condoning consumers’ use of file-trading technologies?
  • 2)    As important, what sort of indemnification does Apple have against labels, publishers and other stakeholders filing claims that iTunes Match somehow facilitates or contributes to piracy by allowing consumers to stash the fruits of their use of file-trading ecosystems? 

 So “Pay $24.99/year and assuage your guilt for all those years of file-trading” could in fact be the subliminal message in Apple’s promotional efforts for iTunes Match? Does this signal a more rational approach to the online world for music labels and publishers?

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Google Makes Lemonade from Lemons: Music Beta by Google

by Mike McGuire  |  May 10, 2011  |  Comments Off

Have you heard that Music Beta by Google is now available – if Google grants you permission to use their “beta”?

Check it out here.  Google wants to make listening to music “…a much better experience,” according to “Chris” who is the talking head who describes the Music Beta from Google in the video that you’ll find at the end of the link.

From what I can tell, this is Google’s answer to Amazon’s cloud-based locker.  According to news reports, like this one(WSJ – so you might need a subscription to get to the whole story)  Google’s music team did not secure licenses from any of the major music labels that would enable the company to sell song files (as Apple’s iTunes or Amazon’s MP3 store do) or deliver a music subscription service a la MOG, Rdio, Rhapsody etc.

So when music label lawyers give you lemons, make lemonade, right? And in this case, the lemonade is effectively a nice little locker for your music files. Users will be able to upload their libraries – or at least part of them—to their Google cloud storage. Then, those songs would be a) backed up in the cloud b) could be streamed to an Android-based device such as a smartphone or tablet.  Synchronization is a big part of Google’s value proposition and in context of the lemons-lemonade homily, it’s probably the best they could come up with.  This synch feature would allow a user to make a playlist on their connected device which would then be automatically synchronized to their account so that the playlist would be available to the user’s PC or other devices.   Google has also developed their “recommendation” capability for the service, thus enabling a consumer to take a single song that, perhaps, matches their mood (you know the drill, it’s a rainy day, so Led Zeppelin’s “When the Levee Breaks”), the service would then generate a playlist based on . . . whatever tools Google has to map the rest of the user’s collection to that seed song.

Groundbreaking, this is not.  (OK, I’m basing this on the video and the descriptions of various attendees at the Google I/O conference. I haven’t yet been granted entre into the beta.)

Without the license from the labels, the world’s biggest search company has had to effectively offer a “service” that is effectively a feature in other services.  For example, MOG, Rdio, Rhapsody etc. all have licenses from the labels which means their users can browse millions of songs, create playlists etc. to their hearts content.  As much as anything else, these online music services enable discovery of content beyond the user’s established libraries – an important value. 

I guess this is a step forward for Google but I’m somewhat surprised by the fact that they haven’t been able to strike deals with the labels.  There must be something in Google’s demands that the labels, for all their faults, found objectionable.  I mean, the labels’ strategic interests surely would be met by having a significant alternative to Apple’s current domination of the market for pre-recorded music sales.

I’m hoping we get a chance to hear more about what it was that Google wanted that somehow didn’t pass muster with the labels. Or maybe it was the publishers? The performance rights organizations (ASCAP et al)?

Until then, however, we’ll just have to make do with Google’s nice little cloud locker.

Could somebody please pass the lemonade?

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