), the world's most popular Internet search engine provider,
plans to launch a subscription-based music streaming service to
challenge companies such as Spotify Ltd. that offer a similar
kind of service to music lovers.
Launched in Oct 2008, Spotify Ltd. is a music streaming
service provider with about 20 million users, a quarter of which
are paid users with monthly subscriptions of $4.99-$9.99. Spotify
Ltd. offers music from major record labels such as
), EMI, Warner Music Group and Universal.
As reported, Google's subscription services will be connected
to Google Play, its online media hub that lets users upload as
many as 20,000 songs to the cloud and listen to them on their
Android devices or online. Additionally, Google has signed
licensing agreements with Universal Music Group, Sony Music
Entertainment and Warner Music Group to give people unlimited
access to their songs for a yet-undisclosed fee.
With this move, Google appears to be tapping the potential in
the music streaming market, which is expected to be one of the
fastest-growing markets over the next few years. According to
data compiled by ABI Research and the NPD Group, music-streaming
services are set for rapid expansion over the next five years due
to the increasing use of mobile phones. The report states that
the growth of streaming services comes at a time when digital
sales are relatively stagnant.
The competition in the music streaming market is getting
fierce. The market is already crowded with companies like
Spotify, Deezer and Rdio whose streaming services are quite
According to the NPD Group, 39% of the listeners in the age
group of 13-35 years use Pandora's streaming music service in the
fourth quarter of 2012, 11% use iHeartRadio streaming service, 9%
are Spotify users whereas the remaining users tune into other
) are vying for a share of the pie by launching similar streaming
In the first quarter of fiscal 2013, Google reported solid
earnings of $10.07per share, exceeding the Zacks Consensus
Estimate by $1.24. Google's gross revenue (including total
traffic acquisition costs [TAC]) came in at $13.97 billion,
representing a year-over-year increase of 31.2%.
However, legal entanglements related to competitive matters or
patent infringements remain an overhang. Google has a Zacks Rank
APPLE INC (AAPL): Free Stock Analysis Report
AMAZON.COM INC (AMZN): Free Stock Analysis
GOOGLE INC-CL A (GOOG): Free Stock Analysis
SONY CORP ADR (SNE): Free Stock Analysis
To read this article on Zacks.com click here.