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Google has glimpsed the future…and it may be yours

More confirmation that Google is set to roll out a music download service linked to its search capabilities with iTunes in its sights.  And that's to be followed by a streaming service in 2011 and sights set on…you.

The first phase of Google's music service is expected to be a Web store where users can buy and download tracks, music industry insiders said. It will be tied directly to Google's search engine, so that people using to look for a particular group or song will be served a link to the company's music store, according to people familiar with the talks.

Sounds innocuous enough, right?  But wait, there's more…

These people also said the download store would be an "interim" step toward what is expected to be a more ambitious cloud-based subscription service compatible with mobile phones built with Google's Android software. A cloud-based service would enable subscribers to stream music directly from the Internet to their mobile phones, so that users wouldn't need to store music files on their devices.

This, of course, is just what Apple is gearing up to do:  Transform iTunes into a cloud-based music streaming experience.

All of this will have several effects, at least:

1.  It will dramatically ramp up the use of streaming audio.  And that demand will drive the infrastructure to service it – at home, at work, and in the car.

2.  It will introduce the possibility – perhaps the probability – that in some form these streams may be made available for free and financed not by subscription but by advertising.  Google in particular has the world's longest tail of advertisers looking for new ways to reach the right people with the right clickable messages. And if their experience with YouTube shows anything it's that they're not afraid to invest a lot of money and a fair amount of time to monetize a seemingly bottomless pit of content. Honestly, very few of Google's initiatives are subscriber-based – almost all depend on advertiser support. Why would this be different?

3.  This will severely challenge the current players in the streaming game since it will create an explosion of inventory (under the ad-based assumption) – but it will also create an explosion of demand as the streaming game rapidly matures.  And with that maturity will come best practices and a booming industry. As with any industry boasting infinite inventory and finite demand, the strong brands – the ones advertisers want to affiliate with – will rise to the top of the heap.  I recommend that you be one of those.

4.  The prospect of subscription streaming services from the likes of Apple and Google will add a new layer of legitimacy and acceptability to the notion of streaming music.  This will crowd the likes of Pandora but will be more keenly felt on any streaming services which are NOT Pandora.  It's good to be number one when Apple and Google crash your party.

5.  Satellite Radio will remain in the game because of their tight relationship with automakers and the fact that much of satellite radio loyalty stems from everything but music.  For the foreseeable future at least.

6.  Terrestrial Radio will have to either get serious about their streaming efforts to level the playing field or abandon these efforts, throw their arms up in the air, and lock themselves in the proverbial cellar as Google and Apple zombies trash the house and pound on the cellar door, pillaging advertisers as they rampage by.  Get serious or step aside.

Maybe this will be just another subscription streaming service.

Or maybe it will be the next YouTube.

What do you think?

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