5/15/13

Google launches a paid streaming music service

All Access will compete with the likes of Pandora and Spotify.

Thad Rueter , Senior Editor

Google Inc. today launched a paid streaming music service in the United States that will compete with the likes of Pandora and Spotify.

Google Play Music All Access will cost $9.99 per month, though the search advertising giant today was offering 30-day free trials and a $7.99 monthly fee for those consumers who sign up before June 30. Consumers can access the service via Android mobile devices and PCs. The announcement came at Google’s annual developer conference in San Francisco.

Consumers already can store their music online via the free Google Music service. That digital content becomes part of All Access once shoppers sign up, and that helps Google make music recommendations for that consumer. Consumers can store up to 20,000 songs for free.

Google reportedly has signed music licensing agreements with Universal Music Group and Sony Music Entertainment, though Google did not offer immediate comment. Google says it can give consumers access to millions of songs. “You can create a radio station from any song or artist you love, browse recommendations from our expert music team or explore by genre,” Google says in a blog.

All Access will compete with Spotify, Pandora and other digital streaming services. They essentially enable consumers to create custom web radio stations defined by bands and genres. 

As of Jan. 31, Pandora had 65.6 million active users—those who had accessed a Pandora account within the last 30 days—according to its annual report. Consumers can listen to up 320 hours of music for free each month (along with the accompanying advertisements)—though only 40 hours on mobile devices. Annual subscriptions for an ad-free service cost $36, or $4 per month if paid that way. In the company’s last fiscal year, subscriptions accounted for 12% of Pandora’s revenue of about $375.2 million. Pandora enables listeners to share music and stations with Facebook friends.

Spotify is a private company that claims 6 million paying subscribers and more than 24 million active users—that is, consumers who’ve used the service within the past month. Consumers can pay $4.99 per month to listen to songs without hearing ads, or $9.99 per month to stream and download unlimited music across multiple devices—and listen to songs offline, too.

According to an April report from the NPD Group, Pandora and similar services account for 23% of the average weekly music listening among consumers aged 13 to 35. That is nearly even with time spent listening to AM and FM radio, at 24%. Digital music files command 15% of that time, with CDs, satellite stations and other forms taking up the rear.

“Driven by mobility and connectivity, music-streaming services are rapidly growing their share of the music listening experience for teens and young adults, at the expense of traditional music listening methods,” says Russ Crupnick, senior vice president of industry analysis at NPD.

Pandora beats its rivals, the market research firm says, with 39% of those younger consumers using the free version of the streaming service in the fourth quarter of 2012. IHeartRadio comes in second, at 11%, with the free version of Spotify in third place at 9%.

Topics:

digital content, e-commerce, Google, Google Play Music All Access, NPD Group, online music sales, Pandora, search engine marketing, Spotify, streamed content, subscription e-retail, web-only retailers

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