Do digital music services need another encore?

In its latest example of “anything Apple can do, we can do better”, Google is set to launch a music service.

The new service, which looks likely to be a direct competitor with Apple’s iTunes, is to roll out as part of an upgrade of its Android operating system (OS) Honeycomb which will power the soon to be launched Motorola Xoom tablet among others.

Details are unclear as to whether Google Music will be a streaming service or operate as a download store. Some reports suggest it could be a download service paired with an online storage “locker” so songs could be saved locally or kept in the cloud, which would suggest an attached subscription fee.

Rumours about a Google Music service have been doing the rounds for at least five years and it is puzzling why Google has not ascended into music until now.

Is Google not concerned that by launching a music service in 2011 it has missed the beat?

By now, most digital music owners have already firmly chosen their service of choice.

Are iTunes users, who account for more the 70% of all online song purchases worldwide, really likely to switch to Google and in turn convert their MP4s in order to have their music collection in one place?

ITunes’ closed system is the reason why it became the world’s most popular digital music service. Other music service start-ups have paled in comparison because Apple produces its downloads in such a way that songs can only be played on its own products. By pushing its hardware, it was not an issue if the download service made little profit because it grew along with uptake of its devices.

Are iTunes users, who account for more the 70% of all online song purchases worldwide, really likely to switch to Google and in turn convert their MP4s in order to have their music collection in one place?

The issue for Google is that Android operates on open source software and many of its users equate “open” to free. The idea of paying for a music service is unlikely to sit pretty with users who can use a multitude of apps to receive a similar service without paying a premium.

Those users are likely to already be listening to their music on services such as Spotify and We7, which offer free music streaming of thousands of songs, with an advert thrown in every third or fourth track.

There is also a wider debate as to whether the rise of digital music services, whether paid for or free, really benefit the artists. Years ago bands used to go on tour to promote their albums, but with digital realm pricing albums at less than £5 a pop, artists are now producing albums to promote their tours.

Last year it was claimed that Lady Gaga earned just £108 for 1 million plays of her seminal hit Poker Face on Spotify. Although that figure has since been disputed, and it must be mentioned that plays on digital services do not equate to record sales (they are more equivalent to radio plays), it is unlikely that artists are seeing the advent of digital music as an appropriate way to gain revenue from their wares.

The big winners are the record labels, which are likely to be enormously cheered by the arrival of Google Music, having not seen a company of weight enter the digital music sector since Apple launched the iPod. A cloud music service means big-figure licensing deals – far larger figures than they are currently achieving with Google’s YouTube which streams music videos for free.

With Apple recently announcing its 10 billionth music download through iTunes, which sells songs at a minimum of 99p, it seems a no-brainer for Google to enter the music space.

But in an already crowded and well-established market, is there a consumer need for another digital music service? Or is search engine giant Google once again – just as it attempted (and subsequently failed) to do with social networking – trying to reinvent the wheel (or perhaps the record in this case)?