This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Google Music Skips a Beat

Stocks in this article: GOOG AAPL P

NEW YORK ( TheStreet) -- Google's (GOOG) announcement of its music streaming service, Google Play Music All Access, had much fanfare going into it. After the announcement, it seems Google dropped the ball with this.

At its I/O developer conference, Google's Chris Yerga unveiled the subscription service to take on the likes of Spotify, Rdio and to a lesser extent, Pandora Media (P).

By pricing the service at $9.99 per month and not having an ad-supported model, Spotify, Pandora and others have little to fear. The ad-supported model has allowed Spotify to grow to over 24 million users, with over 6 million of those paying for the service. Yes, Google's "Listen Now" feature, which can suggest music to you based on your history, and allows you to combine your purchased music with the radio feed, is nice. But the short-sightedness to attack Spotify, Pandora and others where Google knows best (targeted ads), seems like a curious decision, and perhaps a mistake.

Google shares were higher in Thursday trading, up 0.68% to $922.10.

Piper Jaffray analyst James Marsh notes that the subscription is more limited than the ad-supported base, so it seems as if Google is limiting itself in its approach to a streaming service. " T he subscription market is a more limited market, with roughly 20% of radio listeners willing to pay (Pandora's target market is really those they prefer to listen to ads rather than pay)," Marsh wrote in his note. He rates Pandora "overweight," and raised his price target to $20 from $17.

Google is clearly targeting Spotify with this model, but given Google's dominance in ad-supported businesses, one has to wonder why this approach was taken. Google didn't give users a huge reason to switch from Spotify and pay the $9.99 per month ($7.99 per month if users get it by June 30th). It's still obviously very early, with the service having launched in the U.S. just yesterday, but Google could've used its largesse and the fact it has its own operating system, Android, to really put the foot down on its competition.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs