Google All Access, the brand new streaming music service that was announced by Google on Wednesday, is a brave move for the mega-company. They’ve been born into a world of tough competitors: Pandora, Spotify, Last.fm, Rdio, Deezer and Rhapsody to pit themselves against. It’s a major risk, there’s no doubt about that, however, Google’s music service could fail to capture a market share from the big players and still be a success. That’s because delivering music and new accounts is yet another vice for Google to gather the details about its hundreds of millions of users, this information that enables it to better target ads and thus sell more effectively.
“Whether it’s music, photos or mapping activity — each of these are on-ramps to getting your content and essentially behavior into their cloud so they can ultimately deliver more personalized experiences and monetize those experiences,” said Danielle Levitas, a consumer technology analyst at IDC, the technology market research firm.
Google’s database on you just continues to grow, consider the average person: they may have a Gmail account, the Chrome web browser or have on occasion used the search engine, the company knows most of your details; where you live, work, where you’re going, what you’re reading, what you’re searching for, your concerns, what you’re thinking of buying, what you’re watching and, of course, what’s on your calendar and in your email.
Last year, Google changed their policy so they could link all the information from separate accounts and services were not separate, however, Jules Polonetsky from Future of Privacy said: “Users are not likely to see any difference actually because most of what Google is doing they have been always able to do. They were already tracking, personalizing, and tailoring profiles for users based on the different things that you did. There now will be some more data that will be available to do this.” For example, information about a person’s behavior on Google’s YouTube can now be used to serve her better-targeted ads in Google Search. So getting hard data about musical preferences will only strengthen profiles of Google users and allow the company to offer more personalised and valuable advertisements. For example, somebody who is using Google All Access lives in London has been streaming music from the band Local Natives a lot, then Google has the knowledge because of its grasp on their lives on Google calendar, that the person is free on an evening in a month from now when Local Natives are playing, they then could begin advertising the show to the individual through that peculiar intuition.
eMarketer, who focus on digital market research, have gathered research which indicates that nearly 150 million people in the U.S. listen to streaming music services, Internet radio or other audio streamed online or through apps each month. Google’s music service could fail to capture significant market share from players like Pandora and Spotify, but still be an enormous success if it provides Google with information about who’s fond of what music.
“Google is very good with intent data — what I’m researching, what I’m looking for, what I want to buy,” said Anthony Mullen, a senior analyst for the research and advisory firm at Forrester. “I think Google can outvalue people like Spotify because they have a bigger view of my data footprint.”
Google’s 425 million active Gmail users alone (they avoid giving the full number of registered accounts) give Google an immediate advantage with regards to marketing and projected profit, a problem which Spotify have notably had throughout their lifespan. Google’s music app is not free, at all on any level, it is however offering to those who sign up before the end of June, a monthly fee of $7.99 rather than $9.99. Even if many people choose not to spend $10 per month, the free trial period could still provide Google with valuable data.
Google All Access could connect those who’ve previously shied away from Google’s other products “to the Google brand or Google services in general,” said IDC’s Levitas. “For some, music may be the entry point.”
“It’s not like it has to be the best service,” Levitas added. “It just has to be complementary. They just have to be a contender.”
But in the end, it’s all about user data.
“Google’s goal is to use our data to refine its offerings and sell us the result,” Chris Silva, an analyst at Altimeter Group, wrote. “It’s a smart play where the user becomes the product that they resell to us.”
In this situation with the music service, Google had a massive opportunity to evolve the industry as it has in the past, but it seems like the problematic involvements with record labels, the economics of profitable music streaming and an overall lack of innovation.