Google is having trouble getting its ambitious digital music service off the ground in time for the crucial holiday shopping season.
The major music labels are reluctant to wade into untested waters surrounding a “digital locker” service that would allow listeners to store their music collection and stream it to any device.
One big concern is that users will store pirated as well as legal downloads.
Google wants to sign wide-ranging deals that give it streaming permission for the locker service alongside rights for a music download store tied to its search engine.
The labels are fine with song downloads but are balking at the “cloud based” streaming service.
“What’s been holding things up is that the labels will do downloads, but they need to know more about the locker service, and Google really wants to keep the two together,” one senior music source said.
There are also questions about the advertising model for a locker-based service and how artists would be compensated.
“All those details have to be sussed out and they [Google] have to get back to us with details,” the executive said.
While Google has been talking to the record labels for months in hopes of rolling out the download service this year, the executive said “it doesn’t look like it will launch in the fourth quarter, more like late first quarter.”
The executive cautioned that there is still a small chance that Google could pull off a deal by Dec. 31.
Despite concerns, there’s a move toward cloud-based digital services for entertainment. There’s speculation that Apple is developing a music-streaming service.
Meanwhile, Disney’s KeyChest allows users to buy films or TV shows. store them on remote servers and play them on devices ranging from TV sets to cell phones.
“The locker service is a format change,” said one music industry insider.
“Records became cassettes and then CDs and then digital files. Now it’s about having digital files you can transfer and access from anywhere in the cloud. It’s just a great user experience.”
Another music executive said that Google is also exploring a possible streaming radio service. Rights for radio play are much easier to come by than those for download sales.
“We don’t comment on rumor or speculation,” Google said.
In general, the music labels are keen on helping a rival to Apple’s iTunes, which is the dominant player with around 70 percent of the digital music market, according to the latest data from NPD Group.
Earlier this month, Warner Music CEO Edgar Bronfman Jr. told analysts in a conference call that he hoped that Google and other music services “will come online in calendar 2011” and that they’ll create “very significant opportunity both for consumers and the music industry.”