Google’s negotiations with record labels over streaming service are “broken”

Tue, Apr 19, 2011


A little less than a month ago we reported that Google had already begun internal testing on its rumored music service which, by all accounts, will serve as a competitor to iTunes. Google’s purported plan with music involves the ability for users to store their music in the cloud and stream it down to their device. The problem in achieving this, however, is that that type of use requires a different type of license than the one, say, Apple currently has on its own music store.

With word that internal testing had commenced, it seemed just a matter of time for the search giant to make an announcement about their music initiative. But as tends to be the case with Google sometimes, in their zeal to get their service up and running and out the door, they may have underestimated how difficult it would be to strike a deal with record labels.

The Wall Street Journal reported last week that Google’s music plans have come to a halt, with one source saying that negotiations with the record labels are “broken” and that progress is actually receding.

That may be news to some corners of the music industry. Google had representatives in New York last week to talk to the labels, and several label executives I’ve spoken to in recent days told me that they believed their negotiations were progressing smoothly and that they felt confident they would strike deals with Google soon.

But others contended that Google has changed its terms in the past few weeks and that has held up negotiations.

As the smartphone competition between Apple and Google intensifies, one glaring omission from Android has been a centralized place for users to download media content, whether it be music, podcasts, or movies.

Earlier this Fall there were reports that a Google music streaming service would be up and running in time for Christmas. That obviously didn’t happen, and interestingly enough, there have also been reports that Google had previously abandoned its efforts to acquire Rhapsody or Spotify due to internal fighting as various groups within Google were all vying for control of each respective music service. As a result, a unilateral agreement couldn’t be reached as to how to structure an acquisition strategy. Word has it that Andy Rubin is now spearheading Google’s music efforts, and with newly minted CEO Larry Page looking to make Google much more streamlined, that type of in-fighting, we can only assume, will be less likely to occur in the future.



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