Home > Uncategorized > A “Powered by Spotify” Google Music Service is Doubtful

A “Powered by Spotify” Google Music Service is Doubtful

April 24, 2011

Rumors abound about Google Music, but at the moment it looks like they screwed up again.  According to News.com and  Billboard.biz, Google is talking to Spotify about powering the Google Music service.  That would mean that any Google Music service would probably be a hybrid of an unlicensed “cloud” thumb in your eye service such as the one launched by tax cheat Amazon.  A co-branded Google/Spotify service would—well, let’s see, probably put Spotify’s own U.S. service that has been years in the making in direct competition with a version of their service run by Google the Destroyer.

My bet is that Google is trying to do indirectly that which they could not do directly.  More about that.

There is a tendency to mistake causality when considering the encounters of Google and Spotify with music licensing.  The assumption is that there is something wrong with the licensing process that troubles both companies rather than looking at the facts and dynamics applicable to each in their very separate encounters. (Not to say that the licensing process is not painful.)  My suspicion is that Google would probably like you to believe that they are having the same kinds of problems as Spotify.  There are some fundamental reasons why that assumption is probably incorrect.

First consider Spotify. You can argue about their business model, you can criticize subscriptions as a commercial proposition, you can point to declines in higher margin download revenue with the increase in lower margin subscription services—but what you can’t argue with is that Spotify launched a cool product that fans like and that pays royalties.  (And as far as I can tell at this point, gives a reasonably straight count.)  Spotify has never stolen anything from anyone and has positioned itself as an ally of artists,  songwriters, record companies and publishers large and small.  And its actions make that positioning believable, which leads to trust.

Spotify did not come to Congress under threat of a subpoena and was not accused by the overwhelming majority of Members and witnesses of essentially aiding and abetting theft, in the words of Democratic National Committee chair Rep. Debbie Wasserman-Schultz.

No, that honor was reserved for Google.

The reason that Spotify has taken time to close their U.S. deals is for commercial reasons and only for commercial reasons.  They are making a deal.   I can tell you that launching a US digital retailer takes time, even when you have a first rate negotiation team as Spotify does.  And Spotify now is closing.   I can also tell you that I would put better than even money on Spotify picking up the pace on closing its deals and that it will have enough critical mass to launch in a matter of weeks
from now, maybe months but not six months.  That’s just the dynamic of getting these things done.  (Whether their product will be ready is a whole other question, but after all this time I have to believe that they are ready to go, particularly since there will be significant overlap between their existing product and the US service.)

Google, on the other hand is having trouble closing their deals for a very different reason.

Nobody trusts them—starting with most of the members of the Senate and House judiciary committees.  Google has had one disaster after another, all of which lead to one conclusion—they are not to be trusted.  This makes negotiations of any kind–other than here’s my company pay me island money and good luck—very difficult, and laden with pre-conditions that involve cleaning up the past.

Google is a company which is largely dedicated to driving to near-zero the prices of anything that their network touches (or “commoditizing” those prices).  And since they can’t ever get prices all the way to zero or there would be no suppliers, they then do their best to undermine the property rights propping up those prices so they can just take other people’s property without paying anything for it, the ultimate in commoditization.  All under the guise of organizing the world’s information whether the world likes it or not.

They associate themselves with and support academics and non-governmental organizations that further these goals.

They lobby for tortured versions of orphan works statutes and litigated the failed Google Books settlement, each of which would have creators ignore the moral hazard that is shot through both arrangements simply because Google is not “evil.”

They have their people make speeches and write books that mock professional creators (see, e.g., Lessig’s “The Starving Artist Canard”).

They spend hundreds of millions litigating their way to a post-copyright reality (e.g., the YouTube case against Viacom, the Premier League, music publishers and many others) and untold millions lobbying against our interests around the world (see Hargreaves Report, Colab).

And they hired a lawyer who has identified himself more publicly than anyone with litigating against rights holders in many law suits, including Grokster and Limewire.  To the point that he was called out by the judge in Limewire, only to be promptly welcomed with open arms into Google and given a prominent place in Google’s legal coterie at the recent “Parasites” hearing of the House IP subcommittee.  (See “Did EFF Lawyer Cross the Line in Limewire Case?”)

And they want us to believe that Germans spontaneously began egging the houses of their fellow Germans who wanted to be left out of Street View in Germany and hanging signs on their doors saying “Google is Cool”.  Organically.  So to speak.

And what are they good at?  They are good at doing it all very efficiently and with the amoral ambivalence of a shark.  There’s a difference between don’t be evil and being moral.  A shark is not evil, a shark is instinctual.

Sorry, but given this little thumbnail history of Google (that leaves out a tremendous amount of other bad acts), can anyone really be surprised that nobody our business wants to do business with them?  Not because you couldn’t make a commercial deal—but because who would want to be involved with that who could not?

I suspect that Google already built its music service along the lines it wanted and is now trying to force that model onto the creative community.  And it should come as no surprise to anyone that the creative community is pushing back.

There was some thought among the Google Amen Chorus that Google should just buy Spotify.  (That’s the usual solution proposed by these people—Google has so profited from the income transfer from commoditizing creators that it should use its ill-gotten parasitic gains to finish off its host.)  Google’s purchase of Spotify hasn’t happened.  Why?  Aside from the fact that Spotify is not for sale, my guess is that Spotify’s licenses have assignment prohibitions that either expressly name Google as someone the company cannot sell to, or allows the licensor to terminate their license if Spotify sells to anyone else that the licensor doesn’t trust.

And who could trust Google?

Here’s another newsflash—if Google is planning on launching a service like tax cheat Amazon’s “cloud drive” that doesn’t pass muster, I would bet even money that there will be no deal for Google with Spotify, either, because the rights holders won’t approve it.

And why should they?

The law typically does not allow something to be legal if done indirectly that is illegal if done directly. And so it should be.

So when News.com suggests that “the question is whether Google is trying to scare the labels into ceding better  terms” I’d suggest that Google’s problem is more likely one of its own making, and all this scurrying around or rumor mongering is far more likely a case of an arrogant negotiation team that has come up short and is trying to find a way to thumb their nose at creators yet again.

So far it’s not working.

And for the popular cant that creators would welcome a competitor to iTunes–why would they welcome a key player in the rogue sites ecosystem that blithely dissembles to Congress while lining their pockets with ill-gotten gains?  Frank Costello must be having a good laugh.

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