Google set to launch music store Wednesday


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Google Inc., which will launch its long-rumored music store Wednesday, is still furiously working behind the scenes to get key music companies onboard with its plan to take on Apple Inc.'s iTunes and challenge numerous competing digital music services.


After more than a year of negotiations, the Silicon Valley search giant is on the verge of signing a deal with Universal Music Group, the world’s largest record company.

The deal will allow Google to sell digital downloads of Universal’s vast catalog of music and offer a licensed cloud service that lets users tap into their music collection from any Web browser, said people close to the talks who declined to be named citing confidentiality of the discussions.

Google has already “locked up” a deal with EMI Group, according to a Wall Street Journal report. Last week, Universal struck a $1.9 billion deal to acquire the recorded music of EMI.

In addition, the Mountain View, Calif., technology company has reached an agreement with Merlin Network, an organization that represents 18,000 musicians through independent labels worldwide such as Beggars Group, Merge, Epitaph and Warp Records, said people familiar with Google’s announcement Wednesday. Merlin is considered the world’s fifth-largest music label.

EMI, Universal, Sony, Merlin and Warner all declined to comment.

It’s uncertain whether Google will be able to clear the hurdles with the No. 2 and No. 3 music giants, Warner Music Group and Sony Music Entertainment, before its event, set for Wednesday afternoon at Mr. Brainwash’s Studio, the La Brea Avenue compound operated by street artist Thierry Guetta, who calls himself Mr. Brainwash and was the centerpiece of the 2010 documentary “Exit Through The Gift Shop.” Musical luminaries scheduled to attend include Drake, Busta Rhymes and Maroon 5.

Roadblocks to Google’s negotiations with the music companies have revolved around copyright infringement. Record companies, for example, have been pressuring Google to exclude from its search results websites that could be trafficking in pirated music. But Google has resisted, on the grounds that editing out websites could send its search engine down a slippery slope of censorship.

Another set of issues is simply financial. Some record companies have asked for advance payments from Google, said executives involved in the negotiations. The record companiues may be concerned that Google, whose primary revenue comes from search and video advertising, has had limited success in getting consumers to pull out their wallets.

A more intractable point of friction, however, concerns Google’s online “cloud” service, Google Music Beta, which the company launched in May without licenses from the major record companies. The service lets users access their music collection from any Web browser. At issue is a desire by some record executives to have Google charge its users for the service, called Google Music Beta. Google’s free service contrasts with a similar offering from Apple, which charges users $25 a year.

Throughout the touch-and-go negotiations, Google has demonstrated a willingness to forge ahead, with or without the major music companies. In September, for example, Google launched Magnifier, a music blog that gives away digital songs from independent bands to its Google Music Beta users.

The company may do the same on Wednesday and open its new store without all the licenses.

[Update: This post has been updated to include Merlin’s inclusion in the Google announcement on Wednesday.]


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-- Alex Pham