Google tuning up digital music store for late 2010 launch

Google is reportedly in "accelerated" talks to acquire digital publishing rights to thousands of songs, heralding a major step forward in its efforts to introduce an online music storefront to rival Apple's (NASDAQ:AAPL) iTunes. The New York Post reports Google vice president of engineering Andy Rubin is presently negotiating with executives from the Harry Fox Agency music industry publishing firm to secure digital rights to roughly 27,000 songs--according to the Post, the state and pace of the talks indicate Google has successfully engaged the major record labels in its plans, and could formally launch its online music store as soon as November or December of this year. The report notes the Google/Harry Fox Agency negotiations are focusing on pricing, available rights and Google's proposed business model, adding the music industry is likely to align with the web services giant in hopes the deal would give the labels new leverage in their dealings with Apple. Both Google and the Harry Fox Agency declined comment.

News of Google's digital music plans first surfaced in late June--citing sources familiar with Google's talks with the recording industry, The Wall Street Journal reported the company will introduce premium music services across its web platform and Android mobile operating system. The service will connect with Google search results, offering consumers a link to the store when they query a particular artist or song title. Sources add the store represents an interim step toward a more ambitious cloud-based service enabling Android smartphone users to stream music directly from the web.

Google confirmed plans to launch a streaming music service across the Android platform in mid-May. Google vice president of engineering Vic Gundotra demonstrated the solution during the company's I/O developer conference, declining to supply an expected launch date but noting "We think users are going to love this feature." Gundotra added that the music service will leverage technology acquired via Google's purchase of streaming media firm Simplify Media.

A premium download service would vault Google into direct competition with Apple, further fueling the increasingly intense rivalry between the two tech giants. iTunes presently accounts for 70 percent of all premium music downloads in the U.S. according to market research firm NPD Group, with AmazonMP3 a distant second at 12 percent. Sales of digital tracks and albums accounted for 40 percent of overall U.S. music market share in the first quarter of 2010, a gain of 5 percentage points since Q1 2009, NPD said. Adding physical music purchases to the equation, iTunes still leads with 28 percent of all U.S. sales.

For more on the Google music store talks:
- read this New York Post article

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