Streaming music services are a good enough business for Apple Inc. (NASDAQ: AAPL) to move into the sector. The space already has successful, or apparently successful competitors, which include Pandora Media Inc. (NYSE: P) and Spotify. Amazon.com Inc. (NASDAQ: AMZN) has Prime Music. Google Inc. (NASDAQ: GOOGL), which competes with Apple and Amazon on multiple levels, barely cares about the business at all. Perhaps Google believes the industry is too crowded, or it does not believe music can help its search flagship or Android OS.
Apple and Amazon bet that streaming music is a way to get and hold customers for its other, larger businesses. In Apple’s case, this is hardware mostly, the iPhone and iPad. If people keep streaming music accounts with Apple, it will drive loyalty to all the company’s major sources of revenue, much as iTunes has in the past. Amazon believes something similar. Its Prime service tethers customers to its core e-commerce business. Streaming is tied to free shipping, which does not seem to make sense on the surface. Prime has been available for years, but Amazon will not tell whether it is a financial success, as is par for the course for the company.
Google does have a steaming music service, buried among its scores of products and services, somewhere between Google Maps and Google+. Google Play Music works with iTunes, a concession that Apple leads the industry. It also provides a way to view music videos on YouTube. The service costs $9.99 a month, well within the range of competition pricing. But Google Play Music has been abandoned nearly as much as Google+ has.
Google Play Music is a perfect example of how a company that enters a market and then finds that its place in the market creates few or no advantages for it. Google could press the use of its streaming music service. It has a large enough customer count. If it bothered to, it might catch Spotify, which is not much ahead of the Google product in market share.
Google can easily surrender in the streaming music industry. Apple needs to be in it, management reasons, to be “sticky” to customers. Pandora has to be in it because it has no other business.
Sometimes traditional core businesses work well enough that bolting on new ones makes no sense at all. Google will not stream.