Watch out, Apple. Years of pooh-poohing subscription streaming music mollycoddled the iTunes store to the point of decline, but two Google executives say its Play Music service has successfully balanced both song downloads and music streaming, quietly spreading the combo across the globe.
Since launching in 2011, Play Music has proven to be an increasingly important component of Google's broader Play store, which has expanded from smartphone apps to include movies, television shows, and hardware such as the Nexus 5 smartphone. It's Google's way of tying consumers to its core services when they're on an Android smartphone, tablet, or Chromebook PC.Unlike every other major online music service, Google Play Music doesn't shrink from offering both streaming and downloadable music -- two options that intuitively would eat into one another's business. Play Music not only has a store selling digital downloads but also offers an all-you-can-eat subscription service called All Access, providing on-demand listening to millions of songs for $9.99 a month, plus a free cloud storage locker for up to 20,000 songs no matter where you bought them.
Competitors, such as Apple, who ruled the new order of music downloads were dismissive of on-demand streaming -- until digital downloads fell for the first time ever last year as subscription services surged. Now, Apple is said to be considering a subscription service too, with the possible takeover of Beats headphones and its Beats Music service in the mix.
But Google Play Music has kept under the radar. Though Google Play Music is growing fast thanks to surging popularity of the Android operating system for mobile devices, the low profile means Apple's iTunes and Amazon continue to hold court in the digital download realm, and startups such as Spotify have taken the lead in the intensifying race for a subscription-streaming kingpin.
Under that cover, Google has quietly expanded Play Music across the globe -- and it is learning that offering downloads and subscriptions helps, not harms. Fresh off a big launch in Canada earlier this month, and a move into Poland and Denmark just last night, Google Play music is available in 28 countries -- not shabby for a download store that launched about two years ago and a subscription service that's barely a year old.
Paul Joyce, the director of Google Play Music product management, and Zahavah Levine, the director of global music partnerships, spoke to CNET exclusively about the lessons learned in Google Play Music's short life, its reception around the world, and the revelation that streaming isn't siphoning away its digital downloads.
The following is an edited Q&A.
Q: How have you seen consumers' taste in Play Music change in the last couple years, be it between subscription attraction or download attraction? Is it just 'thumbs up, growth, bigger bigger bigger,' or are there more nuances to it?
Paul Joyce: You definitely have the case where there's just growth growth growth, and there's also that case that it's nuanced. Our download store continues to grow in spite of the fact that last year was the first time download sales contracted across the industry. Our subscription service is growing extremely rapidly, and that's following an overall trend. I think in terms user trends, certainly the biggest trend that is impossible to ignore -- and it's one we anticipated many years ago -- is mobile. The phone is the most important music device. We've watched that trend accelerate, and it's a trend we're very excited about because we started with Android, we started with the phone, we're absolutely mobile.
In the more nuanced category, one thing that remains constant is that there is no one music user, and no one answer to how people want to consumer music. What we've seen is it's almost always the case that wherever there is a question, the answer is both. Do they want to own music or do they want to rent music? And the answer is still both. We feel we're extraordinary well positioned with a solution for your legacy music collection with our free music locker, combined with a download store, which lets you buy whatever you want. And one of the things that we've been really surprised about is almost one in five of our subscription users continue to buy music. Some people use subscription as a way to audition things, and music that they love that they want to have no matter what, they purchase. People also have a strong attachment to artists and want to show passionate support for artists.
Zaharah Levine: It makes it easier for us to do special promotions with artists because if we have a bigger reach, then the artists are more excited to be working with us. We did a Lana Del Rey promotion where we were the exclusive store where you could get the single "Once Upon A Dream" from Disney's "Maleficent," the film company took out a big ad during the Grammys. It's harder to get an exclusive when you don't have a wide audience. Now that we have developed a very wide audience and are growing every single week -- we have new users every week, we have more active users every week, our revenue from sales is growing every week -- yeah, we can get something like that, that then turns out to be our fastest downloaded track in Play history.
Joyce: I wish there was just one answer that was right, or right for almost everybody, because it would a lot simpler.
Yeah, a home run would be a lot easier to hit when you know exactly where the ball's coming.
Joyce: And you know, when you have to build more things, it's harder. If there's too much stuff, the experience is cluttered.
Have you seen users among users of Play Music that people who grew up with a transactional model are starting to see how a subscription model fits their life? Do you see it penetrating a mainstream, large-scale audience yet?
Joyce: The adoption is less about demographics and more about awareness. Even though subscription services have been around for more than a decade now, overall awareness is still very small. The overall numbers are still very small compared to physical and digital purchases. I think people are still experimenting with what works for them.
Levine: We're not seeing migration -- although the store is the traditional way to consumer, we're not seeing migration from purchasing behavior to subscription as a major trend. Some people are doing that, but what's we're seeing more of is new people joining for subscription. So we launched our store first, and subscription is turning out to be very additive to our overall ecosystem, bringing new users into the system, not substitutional or cannibalizing, which really goes to Paul's point: Different strokes for different folks.
I think conditions have evolved from a technology perspective to make subscription more compelling, specifically the faster data speeds and proliferation of smartphones of course make a world of difference.
Talk a little bit about how those factors make a difference as you've expanded to new markets internationally.
Levine: Play Music so far, we have penetrated North America, most of Europe, Australia, and New Zealand. We still have regions of the world to address. The regions we have gone into so far are where data and the infrastructure are the strongest. So we haven't had to address as many challenges, but I think Mexico is one example where we have some issues. For example, not as many people have credit cards in Mexico. What we did there is rolled out gift cards to purchase music, and that made a huge difference. Some of the other regions where data is a real challenge, we are going to have to adapt with other kinds of payments.
In the places where you have branched out abroad, have you noticed different patterns, different proclivities to transactional versus something like All Access?
Joyce: There are some slight variations. An explanation can be the familiarity of the country with subscription offerings. So for example, England and Sweden have had access to subscription services for a while and there's more familiarity there. That said, Canada has been a country that hasn't had very many subscription options, but they completely embraced our service. They're over-indexing relative to their population for sign-ups for the All Access service.
Why are Canadians so gung-ho for streaming?
Levine: Canadians love Google Play generally. The Play Store has been available in Canada for some time selling apps, books, and movies. In the last two years, every time we launched a new Google Play Music feature or launched Google Play Music in a new country, we've been inundated with comments from Canadians along the lines of "When are you coming to Canada?" So there seems to have been a lot of pent-up demand.