If you've been paying any attention to music biz news this week, you've no doubt stumbled across an item (or ten) about Google OneBox -- the web search company's bold foray into the world of on-demand music. While many of the reports focus on what this new service means for fans hungry to hear tunes with one-click, they don't often drill down into what this might mean for artists and songwriters.
OneBox has already launched, so you could just go try it out right now. Or, you could read what our vigorous research revealed about the new venture. OK, it wasn't really that vigorous -- we simply entered a band into the Google search bar to see what happened next.
Being that it's so close to Halloween, we figured we'd search for Slayer's classic thrash album, Reign in Blood. Lo and behold, a handful of track titles popped up, with a little "play" icon next to each. We clicked on the title track and were instantly slammed by axe aggression. Neat!
In this instance, the tunes were "powered" by streaming music service Lala (Pitchfork and Billboard readers are probably familiar with Lala, which accompanies select record reviews). In other words, someone is theoretically paying royalties here. But according to reports, it isn't Google.
OneBox functions through partnerships with other streaming On-Demand music services -- the aforementioned Lala and iLike (recently acquired by MySpace Music). When you play a track, there's also a link to purchase an MP3 of the tune, though curiously not at the iTunes store or Amazon -- the two biggest music retailers. Links to music discovery services like imeem, Pandora, and Rhapsody embedded in the search results let you head to those sites and discover music similar to your initial search.
So why would you buy something that you can already hear for free? Well, OneBox only lets you listen to a complete track one time. After that you only hear a 30-second snippet, unless you download the ditty or purchase the right to stream it ad infinitum from Lala for a mere 10 cents.
Naturally, we think anything that will help steer people to legitimate, licensed services is a good thing. But we're also curious about how or if this will turn into revenue for musicians.
OneBox seems like a good deal for those involved: Google pulls in even more queries -- and generates revenue from related AdWord searches, while the partners handle the streams and royalty obligations. Meanwhile, the companies that are powering OneBox get tons more traffic by having their results promoted by Google. But be careful what you wish for: higher per-stream royalties could easily add up to megafigures. What's in it for them? It's a good guess that MySpace and Lala are banking on conversions -- that is, streaming customers who then decide to purchase the track from one of the partner services. But consider this: although Google is prioritizing OneBox music searches, one can easily scroll down and find the same illegally posted MP3s and torrent links that have made Google something of a company non grata among certain rightsholders. Just because you can legally acquire a tune doesn't mean that everyone will. Still, it's better to have the legal option pop up first -- especially when you can listen once for free.
But what about the artists and songwriters? Although the legal discovery of music is enormously beneficial in terms of exposing people to more stuff, there are concerns that with such low price ceilings, artist royalties could suffer. And we're also curious about the publishers, who typically get a penny rate for sales, not a percentage of revenue. If a stream on Lala costs only 10 cents for the customer, are publishers still getting their statutory 9.1 cents? That seems like difficult math to grow a business on.
Since we're still in the midst of the digital transition, it's enormously difficult to predict what things will look like even a couple of years from now. Is P2P on the way out? Will consumers finally be taken with premium subscription services that allow them to listen to music practically anywhere, or will we see new devices like digital notebooks that take the idea of the MP3 to the next level with LP-like artwork, lyrics and a longer product cycle? Can any of this attract enough paying customers to result in a meaningful revenue stream for creators?
What do you think about Google's OneBox? Let us know in the comments. . .