Google Sticks It To Record Labels

Posted by | May 10, 2011 | 4,548 views

Have the major labels finally hung themselves?

Billboard Magazine reported last night that Google would be finally be launching its long anticipated music locker service today—without major label licenses.

As you probably know, the news of Google’s intentions to follow Amazon’s lead and bypass the typical music industry tsuris was first reported here a few weeks ago.

The Billboard story cites sources that say Sony and Universal were the problem children whose demands pushed Google down this path. In my previous story, I identified Sony as the sticking point for Google’s plans and I am slightly surprised to hear that Universal was that problematic as well. I’ve always been very candid in my opinion that UMG’s digital maven Rob Wells is the best in the business, but I’m starting to hear rumblings that UMG CEO Lucian Grainge is starting to gum up the works on some important digital deals. Google just may have been one of them. There’s a feeling out there that Steve Jobs may have gotten to Grainge in much the same way he got to Doug Morris and has “impressed” upon him the importance that iTunes get favored nations–plus one.

The Google service will have some cool features, but evidently will require Flash support, thus not compatible with iOS devices. However playlists will be able to be synched across devices and the service will have a featured called Instant Mix, something like iTunes Genius, that will automatically create playlists around the sonic characteristics of a single track.

This development raises some interesting issues. As I wrote previously regarding Amazon’s move to an unlicensed service, it’s highly doubtful that the labels will sue Google since the issue regarding the uploading of media by a user is currently well into litigation in the EMI v. MP3Tunes lawsuit. It makes no sense for the labels to start throwing money at lawyers to litigate issues that are already in the courts. But what happens if EMI prevails in their lawsuit? The result could very well be licensing chaos.

Let’s not forget the elephant in the room either. What’s Apple’s next move now that they’ve been beaten to the cloud by their sworn enemy? Some industry observers believe that one or more label heads have purposely tried to slow the progress of new music services in order to give Apple some running room to get their cloud service up first. You can bet that Steve Jobs is not too happy about being outflanked by the likes of Amazon and Google.

Frankly I’m thrilled that Google decided to move forward without label cooperation. It’s time that major record labels got knocked from their pedestals and hopefully realize that they don’t necessarily have all of the leverage any longer. For years label arrogance cost investors tens of millions of wasted dollars. Nobody wants to deal with them. Since Google and Amazon have launched services without going through licensing hell, maybe investors will be more willing to come back to the digital music sector.

In the meantime the unlicensed Google music service, along with Amazon’s, could very well be the deathblow to a recording industry that is currently on life support. Unreasonable demands have now cost the labels a lot of money and it’s unlikely that they’ll ever see a dime from Google. They were counting on Google to help save them from Apple and bring them some big coin.

But hey–no reason to get all that bummed out. There will always be some sucker with cash craving to be in show business and sit upfront at the Grammys.

 

 

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Posted by on May 10 2011. Filed under Digital, featured, Labels. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.

2 Comments for “Google Sticks It To Record Labels”

  1. Jeff Rogers

    This is a very interesting situation but man is this reporting biased or what. This sounds like FOX News. A photo of a noose! I would like the labels to stick around and be fruitful. They invest in new artists but moves like this are likely to cause them to not invest in new artists. Instead they will rally their money around protecting what they already own. I like the music locker service idea. I basically use it on my Mobile Me account but I don’t like this sort of label bashing. Bashing a corporation that changes hands and has different staff from time to time seems a bit silly. This article seems to turning some individuals into villains with now actual knowledge of what was said and done. I am excited to be delivered this information but I could do without all the negativity.

  2. The NY Times quotes Android’s head of digital content and strategy Jamie Rosenberg as saying, “A couple of major labels were not as collaborative and frankly were demanding a set of business terms that were unreasonable and did not allow us to build a product or a business on a sustainable business. So we’re not necessarily relying on the partnerships that have proven difficult.”

    Says it all really! Its time the labels realized their terms do not allow others to build sustainable businesses. Investors have lost hundreds of millions because of this fact. I just hope that they finally GET IT now!

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