Comments on: Google, Fresh Out Of the Video Business Sorta Enters Music Business http://uneasysilence.com/archive/2007/08/11814/ Sun, 22 Nov 2009 04:27:42 -0600 http://wordpress.org/?v=2.8.6 hourly 1 By: Jim Smith http://uneasysilence.com/archive/2007/08/11814/comment-page-1/#comment-395088 Jim Smith Mon, 13 Aug 2007 15:28:47 +0000 http://uneasysilence.com/archive/2007/08/11814/#comment-395088 Seems like a no-brainer on Googles part. If they can leverage their existing adsense and adwords infrastructure to subsidize DRM free music, and Universal makes a killing selling DRM-free music, then I think Google has a real chance to seriously injure Apple and iTunes. I see it this way...using adwords and adsense advertising, plus taking a really small taste of each track sold, the service pays for itself, with perhaps a small profit for Google. Google then maximizes the profit that Universal makes by giving a large majority of per track revenue to them. Smart play here on Google's part. The future, whether the labels admit it or not, is in DRM-free music. As users become more knowledgeable, they will start demanding it. Google is offering a (quasi)free distribution system to the labels, and proving they can maximize profits for them. Once the other labels see it working, I think Google's feeling are that the others will follow. Look to see Apple's response....I'm not sure they can respond, as they don't have the advertising infrastructure Google has. Interesting. Seems like a no-brainer on Googles part. If they can leverage their existing adsense and adwords infrastructure to subsidize DRM free music, and Universal makes a killing selling DRM-free music, then I think Google has a real chance to seriously injure Apple and iTunes.

I see it this way…using adwords and adsense advertising, plus taking a really small taste of each track sold, the service pays for itself, with perhaps a small profit for Google. Google then maximizes the profit that Universal makes by giving a large majority of per track revenue to them.

Smart play here on Google’s part. The future, whether the labels admit it or not, is in DRM-free music. As users become more knowledgeable, they will start demanding it. Google is offering a (quasi)free distribution system to the labels, and proving they can maximize profits for them. Once the other labels see it working, I think Google’s feeling are that the others will follow.

Look to see Apple’s response….I’m not sure they can respond, as they don’t have the advertising infrastructure Google has.

Interesting.

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