Google Music Losing Users Weekly

Users have voted on Google Music and the results aren't good so far.

Last week CNET’s top digital music reporter Greg Sandoval reported that Google Music is not living up to expectations, noting that “Google’s managers have told counterparts at the labels that customer adoption and revenue are below what they expected.”

It’s actually worse than that. According to a highly placed digital music executive, Google Music has actually been losing customers week over week–consistently–since it’s launch last November. “I’ve never seen anything like it”, the source said.”It’s astounding. It’s hard to believe that with an install base of over 200 million Android handsets they’re actually losing customers.”

Evidently some label execs are very concerned that things are so bad at Google Music that the mothership might just decide to pull the plug on the whole service, except for the geniuses at Warner Music who have refused to license it. The thinking is that the industry needs for Google Music to be successful so that the whole sector prospers. A failure of Google Music would be perceived as a setback and, of course, a loss of much-needed revenue for the labels.

According to Sandoval’s reporting, Google’s execs say that they’re not worried since the search giant has yet to really throw it’s marketing muscle behind Google Music and that the service will get a big shot in the arm once Google implements its hardware strategy of building an Apple-style array of digital consumer devices. As example, two weeks ago The Wall Street Journal reported that Google is building a wireless entertainment system that will stream music throughout the home. Good luck with that. Once you start going downhill it’s very difficult to turn the tide.

The other players in the US digital music space, Apple iTunes, Amazon, Rhapsody, Rdio, Mog, and Spotify are now left to fight it out amongst themselves. In the download model, Apple and Amazon are the only significant services with Apple, of course, dominating the entire digital music sector. That leaves the four streaming services. Rhapsody, which has been around the longest, boasts of more than a million paid subscribers, but at least half of those were acquired through the company’s purchase of Napster last year. However there just isn’t any buzz in the marketplace about Rhapsody and its growth potential seems rather limited.

Reports have surfaced that Mog has put itself up for sale, though these reports have been denied by the company. CEO David Hyman told Reuters that the service had 500,000 active users, which means that their paid subscriber base is most likely in the neighborhood of 50,000, a pretty pathetic figure. Hyman may be right after all—nobody’s going to pay good money to buy Mog with that kind of subscriber base anyway. Sounds like a fire sale to me.

Industry experts agree that Rdio is in no better shape than Mog and probably a little worse.

All of this, however, pales in comparison to the sensational growth of Spotify. The service has taken every country it operates in by storm. They’ve demonstrated exceptional steady growth worldwide and are approaching 4 million paid subscribers, with well over a million in the US, and many millions more active users. Why? Because the user experience is the best, hands down. Plus the Spotify guys are just smarter than the competition.

This leaves two models and two companies standing to duke it out, Apple and Spotify. Apple never even gave a second thought to Google Music. Spotify is the only service that Apple views as competition, and they’ll stop at nothing to undermine the Swedish up-start, as is Apple’s usual MO. Rumors have circulated that the real reason that Spotify took so long to launch in the US was because Apple threw up every roadblock possible, including threatening the record labels if they licensed Spotify. But Spotify execs persevered and finally launched in the US. Since then at least 2 of the major labels (UMG and Sony) have publicly stated that the evidence shows Spotify does not cut into album sales but, in fact, supplements them. The fact is that Spotify is a lot like radio in that regard. The more a song gets played, the more money the artist makes. The more a song gets played, the more demand is created to own the song–just like radio.

Keep your eye on this space. It will be interesting to see what Apple does to try and torpedo Spotify in the future.




© 2012, Wayne Rosso. All rights reserved.

5 comments for “Google Music Losing Users Weekly

  1. Ed
    January 15, 2013 at 3:06 PM

    I like Google Music quite a bit. Never heard of it until I got my first Android phone a month ago. The music store’s biggest plus for me is that the music you buy is ripped at 320kbps, whereas Amazon’s are ripped at 256kbps on average. Although, I would prefer FLAC.

    Also, I already had a fairly large collection of ~5000 tracks on my computer (a mix of mp3, ogg, and flac files). My collection is too large to fit on my phone. The desktop app was able to upload all these different formats perfectly (although it took about 5 days, lol). The Android app is very nice in that it allows you to pick the artists/albums/songs you want to store on your phone, and you can change which tracks are on your phone very easily.

    My only complaints are that the Instant Mix feature sucks, and the store doesn’t sell music in a lossless audio format.

  2. ben
    March 2, 2012 at 10:57 AM

    yep..i just had a horrible time trying to purchase music on google music. It’s a terrible experience. The app is also really bad. I go back to Amazon everytime. In fact, I’m going to download the album i bought 2 days ago(which i just got yesterday) and upload it to my amazon music. That’s how sucky it is.

    Also, they don’t support the Virgin Islands as a market. Not only was i not suppose to purchase music but Google Maps is terrible and Google Voice can’t call the local area code for free.

  3. March 1, 2012 at 5:17 PM

    I’m a long-term Android phone user, though I also own an ipad. I’ve kept both Google Music and Amazon’s music app next to each other since they launched, and EVERY time I keep going back to Amazon. Amazon’s app UI, especially the newer iteration, is more cohesive looking – the controls make more sense and it just feels like an overall better consumer experience than Google Music.

    It’s amazing Google never tried integrating a deeper search function into the app. Given all their raw search and trending data, you’d think they could create an in-app experience that rivaled Pandora or iTunes Genius. Instead all we got was a service that seemed little more than putting a toe in the digital music waters.

  4. Kris
    March 1, 2012 at 5:04 PM

    Would love to use the product and buy my music from Google, but they are not in my country yet again I cannot use what I can not use.

  5. john
    March 1, 2012 at 2:27 PM

    I’m not surprised google music is struggling. Is availability it’s limited. I’m waiting for it to be available over here because I don’t own any apple products and want all my media to be Android oriented.

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