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Posted by Mark Mulligan on June 23, 2010
Yesterday saw an interesting coincidence of stories hit the wires: on the European side of the Atlantic, the BPI announced that it had sent a cease-and-desist notice to Google in regard to links to copyright-infringed music files. Meanwhile, Stateside, the Wall Street Journal reported on (further) rumours that Google was planning to launch a music download store and subscription service to initially run on Android handsets.
A cynic might argue that the music service "leak" was bad news management from Google, aiming to portray itself as a doer of music industry good, not bad. Whether that was intended or not, it raises an important point. Some time or another (and it looks like it’s going to have to be sooner rather than later) Google is going to need to decide whose side it is on. If it's serious about throwing its weight behind becoming a major digital music player, it's going to need to start making concessions to its label partners. And of course it will start seeing more of a business rationale for doing so: How long will it be before ad revenues from keywords alongside P2P links start to look smaller than potential lost Google music revenue? (Remember we’re not talking about cutting the keyword inventory, just ensuring that legitimate links appear in searches for keywords to appear against).
Although the argument for Google’s responsibility for links was always likely to be challenged following the successful prosecution of The Pirate Bay for the same reason, the music labels will also need to put meat in the game for Google if they want Google as a serious digital music partner. And make no mistake, get it right, and they can be a huge force. The labels and Google need their relationships to be as amicable and as fruitful as possible. The experience of Apple shows that antagonizing a key channel partner just wastes energy for both parties and does little or nothing to help the competition or the fight against free.