Google & Songza vs. Apple & Beats: What Does This Mean for the Music Industry?

by Carolyn Heneghan

It’s hard to imagine, much less desire, yet another streaming music player coming into the picture. Well, in the shadow of the Apple-Beats acquisition, how about a new music streaming hybrid with one of the world’s biggest companies—Google?

According to the New York Post, Google is reportedly in talks to acquire the music streaming platform Songza for a $15 million, a mere sum when compared to Beats Music’s price of $3 billion for Apple. Songza has not yet confirmed this rumor, and neither company has confirmed whether or not the deal is finalized, but the potential of this acquisition definitely impactful on the music industry.

Why Google Wants Songza

Google has several reasons to buy a company like the six-year-old curation prodigy Songza, seeing that one of its main competitors Apple made the same move just last month. Always trying to be in-line or one step ahead, Google knows it needs to step deeper into the streaming music arena sooner or later if it wants to see real success with its various music-related operations.

It’s true that Google already has the Google Play Store and Google Play Music All Access, so it’s not like the company has no foot in the door at all. But these offerings are weak in comparison to services such as Spotify, which has a $4 billion valuation, and Pandora, which has a market cap of $5 billion, according to the Post.

One of the main reasons that services like Pandora are popular is that Pandora has developed the Music Genome Project, the back-end of Pandora that came to fruition over 10 years of detailed music analysis. According to Business Insider, collecting data for one song can take 20 minutes. Pandora uses this 10 years of analysis to create an algorithm that allows users to listen to songs related in sound to the others in the playlist.

Where Songza differs is that instead of using this algorithm, it employs specially curated playlists that are based on moods, location, and activities. Google is looking to jump on owning a service like Songza to bypass the 10 years it would take to develop its own version of the Music Genome Project and to combine the features of Songza with its existing music services.

This includes YouTube, for which Google is creating a new, ad-free paid music platform (the controversy surrounding the licensing is under fire from independent labels, but this is a wholly other issue). This platform will undoubtedly benefit from YouTube’s stance as the single most popular music streaming service, even though YouTube, at least for now, plays videos rather than individual songs.

Apple turned to this similar type of music curation experience when it bought Beats Music last month, which also plays music based on location, who you’re with, what kind of music you feel like listening to, and so on. Apple CEO Tim Cook said that Beats Music is the first streaming music app service “to get it right.” Apple wanted to jump into the streaming game as the iTunes Store is slowly but surely falling out of favor as more users turn to streaming.

Surely, Google would not be far behind.

What This Means for the Music Industry

The music streaming services most affected by this arrangement would clearly be Pandora and Spotify (and any other music streaming service, for that matter). Though Songza doesn’t currently have as many subscribers or bring in as much revenue as either of the two companies, with the backing of Google, Songza could grow, and grow fast.

For one, Pandora and Spotify may be more agreeable with potential buyers, such as Amazon and Yahoo!. These two tech giants will be looking to follow in Apple and Google’s footsteps before they’re left in the dust, as they’ll need to remain competitive in the music streaming market.

Chances are, both Pandora and Spotify will carry a much more massive price tag than Songza. Also, if both platforms are bought, they will stipulate to not be affected much in terms of leadership and operations. Basically, they may agree to be bought out but only under the condition that they continue running as they are currently.

But what if these services do end up changing even slightly under the ownership of a larger company that buys them out—which could definitely happen after the Apple/Beats and Google/Songza acquisitions officially go down? Will Pandora and Spotify be forced to adapt curation styles more aligned with Songza and Beats, or will they be allowed to maintain their own algorithms? And if they are left alone in that regard, will those bigger companies enable them to have outside talent that could further improve those very algorithms?

In short, music fans have a very good chance that the streaming platforms they have come to depend on, after abandoning CDs and mp3s to an extent, could change once again, and listeners will have to adapt to those changes.

Would these changes be for better or worse? It’s hard to tell at this point. There’s no way of knowing whether Pandora or Spotify or any other decently sized streaming services would be willing to be bought out in the first place, let alone allow the larger company to change their current offerings in any way. But it’s something music lovers will need to keep an eye on in the coming years as ownership of these companies begins to change hands.

Whether or not Google will end up buying Songza is up for debate, and neither side has made comments to confirm the rumors reported by the Post. But with tech goliaths like Apple and Google taking one step further into the music streaming market, this could make some serious tidal waves in the industry as we know it.

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