Google close to launching streaming music service

Google has now signed on the three major labels as it gears up to unveil a Spotify rival.

Google

Google is close to unveiling its streaming music service, as it prepares to take on Pandora, Spotify, and possibly Apple.

In March, Google signed a deal for two streaming services with Warner Music -- one tied to YouTube, the other to Google's Android music platform, Google Play. And now Google has struck deals with Universal Music as well as Sony Music, according to a report in The Verge, which suggests that Google could make the announcement at tomorrow's big developer conference, Google I/O.

While Google has been working with the music labels on two services, sources tell CNET that the one tied to Google Play is likely to launch first. Either way, it's a potential boon to the music industry as subscription, streaming services have become a growing revenue source.

Spotify in March passed 5 million paying subscribers , and Apple is still deep in negotiations as it tries to launch its Pandora-like service, dubbed iRadio, this summer. Apple reached a deal with Universal , the largest of the three labels, last week, according to people familiar with the deal.

While a Google Play music product could be big, the one music industry execs are most excited by is the one tied to YouTube . The new YouTube product would be designed for the desktop and mobile devices, according to a person familiar with the negotiations between Google and the major labels. Such a mobile offering, coupled with the powerful YouTube brand, could ignite the emerging streaming-music business, now led by Spotify for on-demand music and Pandora for Internet radio.

If YouTube gets the rights to offer a powerful free streaming service on smartphones, it could be a game changer for music streaming. Streaming services accounted for an estimated 10 percent of all digital music revenue last year, according to a report released last week by the International Federation of the Phonographic Industry, and the music labels are banking on rapid growth.

 

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