San Francisco: Google launched a music service on Wednesday that allows users to listen to unlimited songs for $9.99 a month, challenging smaller companies like Pandora and Spotify in the market for streaming music.
With its new service, announced at its annual developers' conference in San Francisco, Google has adopted the streaming music business model ahead of rival Apple, which pioneered online music purchases with iTunes.
Google's "All Access" service lets users customise song selections from 22 genres, ranging from Jazz to Indie music, stream individual playlists, or listen to a curated, radio-like stream that can be tweaked. It will be launched for US users first, before being rolled out to several other countries.
Google unveiled a string of improvements to other services, including new mapping features and a voice-activated search, at the conference. The focus was on giving more options to users of mobile devices using its Android software, the operating system that now runs three out of every four smartphones sold.
Shares of Google, the world's largest Internet search company, jumped more than 3 per cent while Pandora Media shares were down more than 1 per cent on Wednesday afternoon.
Google's new music service amps up the competition in the nascent market for subscription-based, streaming music. Amazon.com and Apple are among the Silicon Valley powerhouses sounding out top recording industry executives, according to sources with knowledge of talks.
Pandora is spending freely and racking up losses to expand globally. Even social media stalwarts Facebook and Twitter are jumping onto the streaming-music bandwagon.
All these companies see a viable music streaming and subscription service as crucial to growing their presence in an exploding mobile environment. For Google and Apple, it is critical in ensuring users remain loyal to their mobile products.
With a music service, Google further "locks" consumers into its sphere of products and services, said Chris Silva, an analyst with Altimeter Group.
"They're trying to sell an ecosystem," he said. "The more things I'm doing, the more things that tie me to Google services."
At $9.99 a month, Google's service is costlier than the $3.99 required for Pandora, but on par with Spotify.
The music service features millions of tracks from Universal Music, Sony Entertainment Group and Warner Music Group, as well as from thousands of independent labels, according to a Google spokeswoman.
Some analysts said the new service allowed Google to catch-up to offerings from the likes of Spotify, but did not offer anything unique. Forrester analyst James McQuivey said combining the service with video or game content might have made it stand out.
"You don't dismiss Apple, you don't dismiss anyone. But that is not the point," said Rich Tullo, an analyst at Albert Fried & Co. "Pandora is the market share leader in the space and their platform is so disruptive - it's very hard to disrupt them. When you have 70 million people use it - they are the disruptors."
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