One of the most persistent media rumors of early 2006 involved Google launching a digital music service to rival Apple’s iTunes. There was a point earlier this year when it seemed as if every analyst on Wall Street was predicting that Google would be launching GTunes any day now. iTunes was clearly doomed and its days would soon be numbered.
Far be it from me to say “I told you so”, but back in April I went on record with a list of reasons why Google Music won’t matter. Now comes word that Google is going to sit out the upcoming digital music war. Instead, they’ll be partnering with MTV to insert advertising into videos that will be available on the still dismal Google Video service. No matter how Google tries to spin it, the MTV deal is a huge letdown for anyone expecting the company to make its mark on the music industry.
Google’s announcement shouldn’t come as a surprise to anyone who’s been following recent developments in digital music distribution. Late last month Amazon quietly hinted that their digital music service was also being put on hold. It was just a few months ago that the Amazon service generated a fair amount of buzz and rumors were swirling around the Amazon branded digital music player that was supposed to be part of the service.
So what could possibly cause two major tech companies to drop out of the supposedly lucrative digital music business? In a word: Zune.
It seems pretty obvious now that any service Google or Amazon might have launched would likely have been complaint with Microsoft’s PlaysForSure DRM specification. Now that Microsoft is directly competing with its own PlaysForSure partners we have two very high profile competitors dropping out of the online music market before even launching their products. Do we need any more proof that proprietary DRM systems are killing competition in the music industry?
So what happens next?
Amazon is apparently launching a digital movie service in a matter of days. The service will take on iTunes while avoiding any immediate conflict with Microsoft – Zune reportedly won’t support video in it’s initial release.
Meanwhile, Google seems happy to quietly morph into the world’s largest advertising agency. That’s a far cry from the cutting edge tech company that we were all predicting would some day rule the world. It sort of makes you wonder if Zune isn’t actually meant to be a Google killer instead of an iTunes killer.
Meanwhile, there are a few things Google could do if they ever hope to get into the music business:
- Work on developing an open source DRM system that would be available to everyone at no cost.
- Better yet, work on convincing labels that they can make money by selling their music without DRM. Google could easily buy a company like eMusic and become the dominant source of unrestricted music.
- Support development of alternate firmwares, like RockBox, for popular media players. Imagine what might happen if Google released an iPod/Zune upgrade that turned your media player into a Google compatible device?
- Ultimately Google could use any combination of the ideas above to build relationships with jilted PlaysForSure partners anxious to strike back at Microsoft.
In the meantime, with Google and Amazon out of the picture and it looks like Microsoft and Apple will do head-to-head battle with almost no competition.