Why Did Google Buy Songza? Probably Not Because of Beats Music
Google’s Google Acquires Songza
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With the exception of Pandora, a standalone Internet radio service with 77 million monthly users, Internet radio is commonly used in concert with other products and services. Apple uses iTunes Radio to supplement its entertainment services and complement the iTunes Music Store. Amazon offers Prime Music to boost the value of its Prime service and sell more of everything in its vast virtual store.
With Songza, Google gets a service to help attract large numbers of the young consumers desired by technology companies. About half of plugged-in Americans, roughly 124 million people, use a music streaming service monthly, according to Edison. Participation is especially high in the younger age groups. Three-quarters of the 12-to-24 age group use a music streaming service monthly compared to 50% of the 25-to-54 age group and just 21% of the 55-and-over group.
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There’s also an opportunity to engage with older consumers once Internet radio becomes more mainstream in automobiles. While 43% of the 12-to-24 age group listens to music streaming services in the automobile, just 27% of the 25-to-54 age group and 10% of the 55-and-over age group do so.
Finally, free radio gets people through the door. Google’s acquisition might be seen as a reaction to Apple’s acquisition of Beats Music, a subscription service that echoes Songza’s emphasis on curation and playlists. But a closer parallel is Spotify’s mobile app, a free service meant to create demand for the full-featured, paid service. Songza’s particular approach could be secondary or incidental to the leverage it offers in competing with Spotify, Beats Music and other subscription competitors to Google Play All Access.
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