Google Music and the New Payola - Some things never change.

By Dave Kusek

I don't know, I could be wrong about this, but something is not right. Google has finally entered the music space with it's One Box music search feature in brilliant fashion, well position to become the new radio -  complete with behind the scenes deals and major label cronyism.

Google is now going to serve up links to songs from major online retailers at the top of it’s search page, whenever you search on a song name, or artist name, or lyric. It will let you play the song once, and then take you to an option to purchase the song or subscribe to a major music service. The other search results are pushed down the page. Except for the ads, of course.

I was at the Google Discover Music Launch Event in October ’09 in LA. Google's VP of Search Products and User Experience Marissa Mayer said that “Music is one of Google’s top ten searches of all time, as is lyrics. But it hasn’t always been easy to actually find music, which is why Google is looking to offer full song streaming directly from Google." What is this bullshit all about?

That statement is a very major record label point of view. Still trying to preserve the per-track, propped up price of recordings in the digital age.  Can't sell CDs so let's make 'em buy downloads.  Haven't you guys heard about the future of music? The per-track model is not sustainable. The game is already over and there is no going back.

Cell phone companies don’t charge by the call, they sell buckets of minutes and all you can eat plans. Have you checked the popularity of land-based phone services lately?  Digital Music will follow the same path.

Music like water is the future. Not control but limitless access. It's already there on Bing and other search engines, just now a little further down on the Google page. What is Google up to here?

This is called eating your lunch.   First it was Apple and now…

Why should a song file from an "online retailer" come up first in search results instead of the band's own web site? How fair is that? What is this going to do to online strategies for bands? I thought the Internet was supposed to create a level playing field?   And, surely Google is going to be serving up ads on these pages.  How will the ads appear in the search results and how does that money get split up?

Courtney Holt from MySpace said "Google has lots of queries but hasn’t been leading people to a legit experience. It actually gives the rights holder more control, a way to make money." Oh my. Heh Courtney, I thought it was all about giving the fans more control?   Hmmm.

According to the Google Blog "This feature doesn't just make search better. It also helps people discover new sources of licensed music online while helping artists to discover new generations of fans and reconnect with longtime listeners. Our users love music, and this tool introduces millions of music seekers in the U.S. to a new generation of licensed online music services, from MySpace and Lala to Pandora, imeem and Rhapsody."

Goggle and their new friends are now going to drive "music related search" towards major label owned My Space, Gracenote and LaLa services, rather than to the artist sites directly. In this regard they are directly at odds with recent trends in music, such as labels dumping artists left and right, artists moving away from major label distribution channels towards direct to fan models, and the growing power of online marketing strategies and social media. So much for organic search and link relevance.

Does a band actually have to buy an ad now in order to be above the fold in Google search results? Is the only way to be at the top of the page to sign a deal with a major label or online retailer? Is this beginning to sound familiar?  Am I the only one who is pissed off about this?   Come on people, speak up.

Goggle will become the new radio, keeping all the advertising revenue for itself with none of that income flowing to the artists and writers while charging the partners for placement at the top of search results. Meet the new boss, same as the old boss. This is a huge slap in the face to independent artists, managers and new bands trying to break into the mainstream. The barrier to entry has just risen again for new bands.

MySpace and LaLa are also huge winners here, as are Gracenote and their major label investors and owners Universal Music, EMI, Warner Music and Sony. Quite a power play.

Financial terms of the partnerships were not disclosed. You can be sure that the value of the traffic alone is extraordinary to these companies and something they are most certainly willing to pay for one way or another.

Google is also powering the backend of Vevo, a soon to be announced service from the major labels.  Google owned YouTube will serve videos from Vevo.  Watch for this.  I wonder where Vevo is going to appear in the search results?  Vevo announced that Abu Dhabi Media Company joined Sony and Universal as founding shareholders. The deal was rumored to be in the $300 million range. The Vevo service will be free and ad-supported, and is expected to launch later this year. The founding partners will share the revenue.

And these streams of music that play when you click on the search results from Google, well nobody is getting paid for them. No artist, no label, no writer, no publisher - just Google selling ads as you listen.   And just how sticky do you think the pages are going to be, when you are listening to a song and watching Google ads for 3-4 minutes?

What is really Interesting here is that Goggle has not licensed a single copyright in all of this and are not paying any license fees or advances. Amazing.
Size matters.

And, like Apple they have created a defense against litigation from the major copyright holders for all the "illegitimate" content that they regularly direct traffic to. Brilliant. Really.

Maybe I should just buy Google stock and shut up.

What do you think?

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Read the live blog captured from the Google Discover Music Launch Event

Read about the future of the media industry

Google Music and the New Payola - Some things never change.

 

© 2009 David Kusek