Google Launches New Music Service To Compete With Spotify, Can It Work?

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Google Looks To Enter The Social Media Music Market:

Google has built a reputation on search engine technology but critics maintain they’ve used their dominance to start other businesses that compete directly with competitors as second movers.  From Google+ to Google Play, the company has made new startups nervous when they enter the market.  This week, Google announced “Google Play Music All Access” to compete with the likes of Jango, Spotify and other digital music services for $9.99 per month.  Can Google be a revolutionary disruptor in the music sector online and mobile?

Unlike the Google Glasses and technology for the Mars Rover, most new products Google develops aren’t game changers and the company still brings in most of its revenue from search where it has little competition. Google music joins several social media music concerns that are leaders in the space and music in general is less profitable as an industry than it was just a few years ago.  This doesn’t mean Google can’t succeed in the music industry but two things are important to remember, Spotify accounts for more music industry revenue than record sales and the future of music is mobile.  Google isn’t ignoring the trends but they continue to be a bit late such as Google Buzz/Google+.

As the music sector expands expect consolidation instead of new entrants because economic profits are harder to come by.  Google is probably looking to get spillover effects for its social network by implementing music and doesn’t mind if “Google Play Music All Access” is a loss leader.  Once again, Google just wants to get the company footprint in the door before it closes in front of them.  Not a bad strategy.

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