Google launches music subscription service as stock soars above $900 US

Google Inc. on Wednesday unveiled a streaming music service called All Access that blends songs users have already uploaded to their online libraries with millions of other tracks for a monthly fee of $9.99 US.

The service puts the internet goliath in competition with popular paid subscription plans like Spotify, Rdio and Rhapsody and free music services like Pandora.

The announcement at Google's annual developers conference in San Francisco kicks off a wave of developments in the digital music space that are expected to entice consumers with ways to listen to music on a range of devices.

Rival Apple Inc. is expected to debut a digital radio service later this year; Google-owned YouTube is also working on a paid subscription music plan; and Sweden's Spotify is exploring a way to make a version of its paid streaming plan free with ads on mobile devices, according to a person in the music industry familiar with the matter.

The person was not authorized to speak publicly about the developments because the deals and features on the services have not been finalized.

Google's announcement came just as its stock soared above $900 US on the Nasdaq for the first time, and its market value surpassed $300 billion for the first time. The stock closed at $915.89.

That's in stark contrast to Apple, whose shares have been on a downward streak for months and closed at $428.85.

Google lags Apple in music offerings

Google is playing catch-up in the digital music space after launching its music store (now part of its Google Play app store) in November 2011. Apple's iTunes Store, which launched in 2003, is the leader in song downloads and Spotify claims about 6 million paying subscribers worldwide.

But Google's massive reach on mobile devices that use its Android operating system means it could narrow the gap quickly. Some 44 per cent of active smartphones in the U.S. are powered by the Android software, according to research firm eMarketer. Google said about 900 million Android devices have been activated worldwide.

All Access is available in the U.S. as of  Wednesday and comes with a 30-day free trial. It is expected to roll out soon in 12 other countries where Google currently sells music, including 10 European countries, Australia and New Zealand — but not Canada. If you start the trial by June 30, the monthly fee drops to $7.99 for the foreseeable future.

Google's All Access allows users to search for songs, albums or artists directly, or peruse 22 different genres. Google curators also offer up recommendations based on your listening behaviour and your existing library of songs.

'Radio without rules'

You can listen to any of millions of tracks right away, or switch to a "radio" format that creates a playlist of songs that you might like. Radio playlists can be adjusted on the fly by deleting or re-ordering upcoming songs.

"This is radio without rules," said Chris Yerga, engineering director of Android. "This is as lean-back as you want or as interactive as you want."

By combining an all-you-can-listen-to plan with music sold from its Google Play store, the service covers any gaps. Some artists, like Taylor Swift, keep recent releases off of streaming services for several months in order to boost download sales. The combination also means people can listen to their own specialized music or bootleg recordings alongside the millions of tracks available from Google.

All three major record labels — Vivendi's Universal Music Group, Sony Music Entertainment, and Warner Music Group Corp. — are part of the All Access service.

Listening to music streamed over cellphone networks has become extremely popular. According to research firm eMarketer, over 96 million Americans are expected to stream music on mobile devices at least once a week in 2013, up from 85 million a year ago. About 147 million Americans are expected to stream music on the go at least once a month this year.

Leaderboards for games allow smartphone, tablet play

On the game side, Google announced that it is adding leaderboards and the ability to match players in online games to its Android operating system for smartphones and tablet computers.

The new features match those available in Apple's Game Center for the iPhone and iPad. Google is also making it possible to save game progress online, so players can pick up games where they left off, even on other devices.

Three employees tried to demonstrate on stage how they could all join a racing game but failed to pull off the demo because of wireless connectivity issues in the conference centre.

The Google Play leaderboards will also be available through a browser, said Hugo Barra, vice-president of product management of Android.

Nexus 7 upgrade anticipated

The three-day developers' conference, dubbed Google I/O, provides Google with an opportunity to flex its technological muscle in front of a sold-out audience of engineers and entrepreneurs who develop applications and other features that can make smartphones and tablets more appealing.

Much of the speculation about this year's conference has centered on a possible upgrade to the Nexus 7, a mini-tablet that debuted at last year's event as an alternative to the similarly sized Kindle Fire made by Amazon.com Inc. and the larger iPad. A few months after the Nexus 7 came out, Apple released the iPad Mini to counter the threat posed by Google's entrance into the market.

So far, Google hasn't showed off new hardware at this year's conference. Instead, it announced that it will be selling a version of Samsung's new flagship phone, the Galaxy S4, which runs a "clean" version of Android, without the modifications that Samsung applies to its phones.

Google will be selling a Galaxy S4 with 16 gigabytes of internal memory for $649 in the U.S.