Feeds

Breaking Google's last taboo

From search to selling bits

Build a business case: developing custom apps

Google has traditionally charged into other business areas with all the subtlety of a bull in a china shop. This isn't always a bad thing: there are plenty of cosy industries that are ripe for a shake-up, and advertising is one of the cosiest. But there's one area that's been strictly taboo.

Google has always linked to other people's stuff, and stayed out of retailing bits itself. Over time it's blurred that line, without ever really crossing it. This was a line that Microsoft never really crossed either, although Windows Marketplaces were announced, then came and went phut, as regularly as Service Packs.

Now we can confirm that Google is gearing up for a Music Store - CNet's Greg Sandoval hears this could be upon us as soon as the autumn, it may decide this high-minded distinction is no longer one worth preserving. The rumours strongly suggest Google will be integrating music into search - no surprise, there - but there's plenty of speculation that it will go the final step, and retail the music directly.

Let's put aside for a moment the China experience, where Google - with the full blessing of the major labels - launched a free MP3 download service, entirely supported by ads. This was a very unusual situation, where China's dominant search portal Baidu was serving up MP3s without a license, hosted on an ever-changing network of obscure domains that nobody else could reach. Rights holders aren't about to repeat the experience here - and with a market of willing buyers, there's no reason why they should. So disregard it as a precedent.

The reason for Google's reluctance to sell digital bits is pretty obvious: its market dominance as a search engine puts it directly into competition with online retailers, and puts them at a potentially crippling disadvantage. If Google is the first port of calling for getting to stuff on the web, why would anyone find a second? Google takes you directly to the checkout. It spells the end for any online retailer without massive scale, and the brand and resources to match.

But you can see the thinking, here, even if you don't approve. For some time Google has eyed the rise of price comparison sites with some irritation. What value do they add, a Googler might ask? Most are little more than crummy pseudo-editorial sites, in the pocket of the largest vendors. Surely a classic case for intervention by algorithm. Well those price comparison sites are already earmarked for extinction and few will mourn their passing - they don't really add much value. But then again, that doesn't mean Google will be pushing out the bits itself. It may simply subsume price comparison into its existing apparatus.

And once again a Googler might ask - why on earth go the extra step? It's not as if the Chocolate Factory wants to sell you lawnmowers or TVs, the high-margin end of Amazon's business. It's only an MP3. In terms of scale, the world's music is somewhere between 25 million and 35 million MP3s, but then only a small proportion of that really matters to a mass market retailer - you'll recall the study that showed that of 12 million songs in (what we assume to be) the iTunes catalog only 3 million sold a copy in one year. Google has plenty of capacity and bandwidth - why not remove the extra step and sell it directly?

It has demonstrated how. Three weeks ago Google unveiled a section of the Android Market that sells music. (Yes, the Android store is Google's only example of selling bits itself.) From the China experiment, Google knows who to call. Whether it wants to is another thing. For any global operator acquiring rights is a world of pain - the music business is still territorial, and the fragmentation of music publishing rights means it can take weeks or even months of work simply to find who owns what. This is not a problem an algorithm can answer.

Google is now so large it could probably buy the entire sound recording industry for small change - certainly less than a quarter's revenue. Even if it does, the licensing headache doesn't go away. So it will certainly be more effective for Google to employ an intermediary to sort this out.

If Google were to employ the same ruthless approach to music as it did with books, Google Music could be a serious challenger not just to every music retailer on the planet, but every producer and rights owner too. We'll have to see if the company has been chastised by the experience, in which governments eventually turned against the landgrab. I suspect it hasn't. ®

Build a business case: developing custom apps

More from The Register

next story
Assange™: Hey world, I'M STILL HERE, ignore that Snowden guy
Press conference: ME ME ME ME ME ME ME (cont'd pg 94)
Premier League wants to PURGE ALL FOOTIE GIFs from social media
Not paying Murdoch? You're gonna get a right LEGALLING - thanks to automated software
Online tat bazaar eBay coughs to YET ANOTHER outage
Web-based flea market struck dumb by size and scale of fail
Amazon takes swipe at PayPal, Square with card reader for mobes
Etailer plans to undercut rivals with low transaction fee offer
US regulators OK sale of IBM's x86 server biz to Lenovo
Now all that remains is for gov't offices to ban the boxes
XBOX One will learn to play media from USB and DLNA sources
Hang on? Aren't those file formats you hardly ever see outside torrents?
Class war! Wikipedia's workers revolt again
Bourgeois paper-shufflers have 'suspended democracy', sniff unpaid proles
'Aaaah FFS, 'amazeballs' has made it into the OXFORD DICTIONARY'
Plus: 'EE, how shocking, ANOTHER problem I face with your service'
prev story

Whitepapers

Endpoint data privacy in the cloud is easier than you think
Innovations in encryption and storage resolve issues of data privacy and key requirements for companies to look for in a solution.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Solving today's distributed Big Data backup challenges
Enable IT efficiency and allow a firm to access and reuse corporate information for competitive advantage, ultimately changing business outcomes.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.