Google Plans Online Music Store to Challenge Apple, Amazon
Source: ETHAN SMITH and AMIR EFRATI
Google Inc. is creating an online music store to compete with Apple Inc. and Amazon.com Inc., though the company may open the service without the rights to sell songs from many of the biggest record labels, according to people familiar with the matter.
According to these people, all four of the major music companies have held talks to license their catalogs to Google for the new online store. But only the smallest, Citigroup Inc.'s EMI Group, is close to a deal, they said. EMI's artists include Katy Perry, Gorillaz and Pink Floyd.
None of the three larger music companies is close to reaching a deal, but they continue to talk to Google. Those companies are Vivendi SA's Universal Music Group, Sony Corp.'s Sony Music and Access Industries Inc.'s Warner Music Group.
The talks come amid growing competition in the online-music business.
Google is in a race with rivals Amazon and Apple to create services that combine retail sales and remote music storage, known as "cloud" or "locker" services.
Apple is trying to take the lead in that race with this week's rollout of iCloud, which promises to offer a more comprehensive combination of features than either Amazon or Google currently does.
Google's plans were reported earlier Thursday by the New York Times.
Unlike Google or Amazon, Apple secured licenses from the four major music companies that will let its users create remotely accessible online-music libraries without going through a time-consuming uploading process.
Google's Music Beta and Amazon's Cloud Player both let users store music online, but because neither service has licenses from all the music companies, users must upload most of the music they want to store in the system―if not all of it.
When Google launched its free music-file storage service in May, Google executives said the company couldn't reach a broad agreement with record labels.
Jamie Rosenberg, a director of digital content for Google's Android mobile-software unit, which oversees the company's music initiatives, said at the time that some labels, which he declined to name, had "terms that we felt were unreasonable or unsustainable." But he suggested at the time that Google would work on partnerships with more agreeable labels.
So far, Google has offered a slew of free songs from artists including Shaggy to early users of Music Beta, which is still in an invitation-only testing mode.
Among concerns expressed by record executives: Online locker services could offer legitimacy to music acquired via piracy.
Google's Mr. Rosenberg said in May that Music Beta, which lets people upload up to 20,000 songs, including from their iTunes libraries, "is intended only for lawfully acquired music" and that the company would "respond to complaints by rights holders if they feel their rights have been violated."
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