Competition for iTunes? Google Music, Spotify Making Launch Strides

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Are iTunes’ days of digital music dominance finally about to come to an end? New reports are suggesting that Google is closing in on a launch date for its much-rumored music service at the same time as Spotify is said to be making progress with its potential second US signing.

Google Music has been the subject of much speculation since its existence was first mentioned last year, and Businessweek is suggesting that a launch may come as soon as next month, although CNet suggests we’re months, rather than weeks, away. Although the technology is said to be in place – the service is said to link Google’s search engine tech with YouTube’s music videos as well as downloadable files to create a one-stop shop for your music needs – the hold-up is apparently the licensing negotiations with record labels, with the service’s unique set-up requiring complicated deals and agreements.

Meanwhile, according to the New York Times, Spotify is nearing a deal with EMI Music for a US license, giving the streaming music service access to the catalogs of two of the four major US labels (Spotify signed with Sony Music Entertainment last month) and suggesting that a US launch is within sight. One of the reasons such dealmaking has been so lengthy may have been Apple’s doing, according to Spotify Chief of Global Business Development, Faisal Galaria; in a recent interview, Galaria explained how easy it would be for Apple to have undue influence over record labels:

If you’re the digital team [at a label] and 80% of your revenue was coming from one place, how much are you going to piss them off until someone else can guarantee all that revenue from a new source? Put yourself into their shoes for a moment – you’re a nice, fat big executive at label X, Y, Z. You’re getting half a million dollars a year as long as you hit your bonus. Your bonus means that 80% of your revenues comes from iTunes. Are you going to tell iTunes where to go? Because your half a million dollar bonus is now gone. Even if you’re this big, fat executive, you might agree that Spotify is the best thing. Am I going to risk it?

Galaria declined to suggest a potential launch date for the service in the US, and with a deal with Universal Music Group – the largest of the US labels and assumed to be a “must have” before launch – being said to be far from happening, it’s possible that no date has been targeted internally. Maybe Apple and Google are stopping it from happening between them…

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