Peter Kafka

Recent Posts by Peter Kafka

Google Music Label Talks "Going Backwards"

Google has spent a year trying to build a music service that could compete with Apple’s iTunes. But those efforts seem to have stalled again.

Google’s negotiations with the big music labels are “broken,” says a source familiar with the search giant’s thinking: “There’s definitely a problem with the Google music conversations.”  Another industry source says Google’s top executives are reconsidering their music plans altogether. “They’ve gone backwards,” I’m told.

That may be news to some corners of the music industry. Google had representatives in New York last week to talk to the labels, and several label executives I’ve spoken to in recent days told me that they believed their negotiations were progressing smoothly and that they felt confident they would strike deals with Google soon.

But others contended that Google has changed its terms in the past few weeks and that has held up negotiations.

Google officials, who have yet to formally acknowledge their music plans in public, haven’t responded to requests for comment. Wayne Rosso, who once ran the file-sharing service Grokster, wrote a blog post earlier this week asserting that Google was “just about at the end of their rope” with the labels.

One issue that could have complicated Google’s discussions with the labels is Amazon’s launch of its own music service last month. The online retailer, which already sells digital music it licenses from the big labels, launched a cloud-based storage service without getting approval from any music owners.

That service is fairly limited, and Google had envisioned a more robust offering with the labels’ participation. But it’s possible to imagine a scenario in which Google launches something similar without label buy-in, too.

In that scenario, Google wouldn’t be able to sell music, but it would at least be able to offer online storage that users could access from their PCs or phones. Lack of a decent music service has been a notable weakness for Google’s Android platform, and Android head Andy Rubin has been the driving force in Google’s music efforts.

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There’s a lot of attention and PR around Marissa, but their product lineup just kind of blows.

— Om Malik on Bloomberg TV, talking about Yahoo, the September issue of Vogue Magazine, and our overdependence on Google