Google Also Looking Into Music Service Tied To Search [Report]

As Microsoft launched its Bing Entertainment search hub, it’s no surprise that reports are surfacing about Google planning to roll out its own music service, tied-in with its search engine. Citing “people familiar with the Internet giant’s discussions with the music industry,” a Wall Street Journal report started the rumor a couple of days before the Bing Entertainment launch and has since been largely picked up worldwide.

A Music Store
So far, Google was offering streaming music on its platform via its partners, Pandora and iLike. However, the WSJ report said that the company is now looking to integrate its own music services to its search platform. According to the Journal and its sources, the search giant is set to unveil the music service “later this year, followed by an online subscription service in 2011.” Apparently, Google has been pushing talks with record labels to offer music via phones running on Android, but the “proposals are still vague” and “the download music store is still months away,” the report said.

Cloud-Based Subscription And Search Tie-In
Sources are further cited as saying that the music download store will be a first step towards a cloud-based subscription service that would provide direct mobile streaming from the web, freeing users from the hassle of having to physically store music on their devices. To access the service, subscribers would have to use Android-supported phones.

It’s not clear from the article whether Google would seek to mesh together all entertainment verticals (such as movies, TV, games, etc) into its SERP or if the move is solely intended for music.

Heated Competition vs Apple
What seems crystal clear though is that such an online music store would come into direct competition with iTunes, especially given the fact that Apple itself is widely speculated to be preparing a cloud-based version of iTunes. While the launch of such a product from Google might just bring more grist to the mill in the search giant’s ongoing tensions with Apple, the move would provide record labels with a breather. As the WSJ reports, the music industry has indeed been “concerned about Apple’s dominant position among U.S. music retailers.” “Apple accounted for 28% of all music purchased by U.S. consumers in the first quarter, according to NPD Group,” it said.

Record Labels have been trying to push Amazon to counter iTune’s position by allowing the online bookstore to release tracks on Mondays through its Daily Deal service at $3.99-$5.99 per album. This is one day of the official street release and compares to a standard $9.99 price tag. No wonder, Apple has since been reported as throwing its weight around, using its dominant position to prevent labels from participating. According to Billboard, the Department of Justice is now seeking information from major record labels and has spoken with “a number of digital music services” as part of an initial inquiry over the potential effect of iTunes’ market dominance on pricing.

Bing Face-Off
Google is currently already at odds with Apple the operating platform issue of iPhone vs Android. Apple is also said to be ready to leave Google for Bing in terms of search engine offer for its iPhone. Apple has already let Bing through the door by making it one of the search engine choices for Safari. That music store would add to the list of griefs…

As far as Bing is concerned, its music offering is part of a much wider ecosystem linked to entertainment search. It wouldn’t be unfair to say that its new entertainment hub seems far more advanced in terms both of user service and paid search opportunities…
Bing is being very aggressive, is innovating big time and has no qualms about dumping failed initiatives too, like its CashBack operations. Google has been making parallel announcements to Bing during the past weeks. And while Bing has been striking hard on the deep-context search with its Bing Entertainment hub, Google’s main news were its Caffeine indexing system (quickly countered by Bing’s Index Explorer boost) and its planned Newspass paywall.

Where do you see the competition heading to in the next weeks/months?