Forget the Football World Cup: Summer 2010 is shaping up to be one of the most exciting periods in digital music’s short history. Spotify is preparing to launch in the US (still); Nokia (NYSE: NOK) is rolling out multiple new Comes With Music territories; MOG is finding its feet as a premium subscription service; and a number of exciting new services are primed for launch.
But as with the World Cup, we’ve already got a decent idea of who the finalists are likely to be: Apple (NSDQ: AAPL) and Google (NSDQ: GOOG). Continuing the World Cup analogy a little, Apple is Argentina, the once-great force that has lost its way a bit but arguably has the best array of talent, and looks like it may just be about to have the engine purring like a tiger again. Google takes the role of Holland: a slick, skillful team that has never won the World Cup.
Closed vs open is actually closed vs…er…closed: Google is playing the role of disruptive new entrant and has mischievously played upon Apple’s original 1984 marketing, positioning Apple as the Big Brother now. It has also played strongly on being open versus Apple’s closed approach. But the bottom line is that Google’s music strategy looks likely to be pretty closed too. The fact that the Android Music Store is designed to work with Android devices means it will be exclusive just like the iTunes / iPhone / iPod / iPad ecosystems. The difference is that Google is betting on a wide range of partners having a large installed base of customers on its platform so it will “feel” open.
The role of the cloud. Of course, the music download store has never been the end game of any company with even an ounce of strategic nous. The margins are so small that the a la carte download store only has any value as a means to an end. Apple uses it to enhance its device proposition and Google looks set to follow suit for similar reasons. But expect Google to integrate the store in a broader cloud-based offering, just as Apple is likely to do, possibly as early as June 7. Both Google and Apple have bought their way into cloud expertise (via Simplify Media and Lala, respectively) and both understand that music listening and unlimited on-demand access to new music trump music buying many times over. So if you’re going to have a compelling music-device experience, you need to play to the access and consumption cards.
Device agnosticity but not platform agnosticity: Apple, Google, Nokia and others recognize the crucial importance of consumers being able to take their music experience with them across multiple devices. Apple and Google look primed to take this to another level. But the great irony is that the very act of giving consumers more choice of devices limits their choice of platform (and thus locks them into a particular ecosystem). Of course, both Apple and Google may well decide to have an open-access web component to their offerings that is not explicitly tied to a device. But make no mistake, these will be acquisition tools for their device and platform plays. Curtailed platform liberty will be the price music consumers will have to pay for increased device freedom.