Google Buys Songza in a Move Much Bigger Than Apple Rivalry

Source: Songza

A few months after Apple’s (NASDAQ:AAPL) acquisition of Beats Music, Google (NASDAQ:GOOG) has announced a music service acquisition of its own. In a post on the Google Play Google+ page, Google announced its acquisition of Songza, a music streaming platform which it characterizes as a “a great service which uses contextual expert-curated playlists to give you the right music at the right time.” The acquisition gives Google a streaming service to match Apple’s iTunes Radio and Amazon’s (NASDAQ:AMZN) Prime Music.

No immediate changes to Songza are planned, so the service will continue to work “like usual” for current Songza users on Android and iOS. The company does have plans to integrate Songza’s services into its two other music apps, Google Play Music and an upcoming YouTube streaming service. Google wrote: “Over the coming months, we’ll explore ways to bring what you love about Songza to Google Play Music. We’ll also look for opportunities to bring their great work to the music experience on YouTube and other Google products.” The price for the acquisition has not been disclosed.

Songza, which launched in 2010, has gathered only 5.5 million users versus Pandora’s (NYSE:P) 75 million and the 40 million each gathered by Spotify and Apple’s iTunes Radio, according to The Wall Street Journal. However, the service is best known for its ability to account for a user’s location, the time of day, or the day of the week in its curation of custom playlists. The 40-person team behind Songza will join Google, according to the Journal. Mashable reports that the company will move to Google’s New York offices this summer.

Google is expected to integrate Songza into subscriptions for Google Play Music and the YouTube service, which is expected to be launched within the next few months. Songza CEO Elias Roman also says that the technology could be used to target ads, or to provide book and movie recommendations — an area for which Roman visualizes a big future. “Historically the [Internet] has been about searching and browsing,” he told The Wall Street Journal. “The future isn’t about people finding things, it’s about things finding people.”

Songza implements both algorithms and human curation, and keeps the two separate, according to Mashable. And while the company hasn’t yet expanded to areas other than music or the advertising that accompanies it, Google has reportedly been looking to improve the recommendations provided in the Google Play Store. Songza’s technology could do that, as well as strengthen the music and digital content services that Google views as integral to attracting users to Android. The move is widely perceived as a response to Apple’s May acquisition of Beats Electronics and the company’s Beats Music streaming service, but Billboard posits that Google didn’t acquire Songza because of the Apple-Beats deal.

Billboard reports that Internet radio services are “already mainstream”; the most recognized music streaming services are Internet radio services. It places Pandora’s brand recognition at 70 percent, iHeartRadio’s at 48 percent, and iTunes Radio’s at 47 percent. Brands with lower recognition are largely on-demand services, like Rhapsody at 40 percent, Spotify at 28 percent, and Google Play All Access at 24 percent.

Billboard also notes that, with the exception of Pandora, Internet radio services are often used as a supplement to other entertainment services. Songza may enable Google to attract more young consumers and sell more media in the Google Play Store.

Billboard writes: “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.”

As Internet radio becomes more commonly used in cars, Google will also be able to use Songza to attract more older users. Songza parallels Spotify’s mobile app, a free service that gets users to pay for a premium subscription to the full service. Songza’s free service can bring Google more customers, to whom it will be able to sell more media and services with the improved recommendation services that Songza’s tech can help the company deploy to the Play store.

Mashable reports that Songza, in turn, will benefit from the acquisition with the possibility of adding an interactive layer to the service. “This is just the beginning,” Roman told Mashable, referring to the amount of data that the service will be able to incorporate into its playlist curation.

Mashable writes: “Imagine a scenario where Google Now can incorporate Songza-esque information. So that at 8:35 a.m., you can automatically start listening to music for the workday — and a workday that might be taking place on a rainy day. Roman can also see a vision of the future where Songza’s blend of predictive and curated content can be extended outside of pure music and be structured around podcasts, news reports or even videos.”

Those changes aren’t likely to happen immediately, with Songza noting that it just expects the service to get “faster, smarter, and even more fun to use” in the near future. Users are likely to see Songza’s tools deployed to the Google Play store first. It’s possible that Songza will also extend its mix of algorithms, which have traditionally been more Google’s speed, and human curation to Google’s services and the selection of content that it places in front of users.

That kind of addition could see Google learning from one of Songza’s strengths — the ability to provide playlists to accompany moods, events, or routines — and offer the same kind of curation of media, services, and content.

In any case, Songza writes that its team is “walking on sunshine,” an apt musical reference for a company that at the very least can expect to see its user base and brand recognition expand following its acquisition by Google.

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