Google is planning to introduce the new service as early as Wednesday at Google I/O, the company’s annual conference for software developers. The subscription feature will be connected to Play, Google’s online media hub, complementing its download store and “locker” feature, which lets people store their digital entertainment collections online, according to these people, who spoke on the condition of anonymity before Google’s official announcement.

News of the announcement first appeared on The Verge, a technology-oriented Web site. A Google spokeswoman declined to comment.

Google has been developing entertainment features for Android mobile devices, which puts the company in direct competition with digital music leaders like Apple, whose iTunes store is the largest retailer of music — digital or physical — in the United States. While Android phones and other devices remain extremely popular, Google has had limited success with its download store, people in the music business say.

By expanding to streaming music, Google will be tapping into the most rapid growth area in digital music. Spotify, which was founded in Sweden in 2008 and came to the United States almost two years ago, now has more than 24 million regular users, six million of whom pay about $5 to $10 a month for premium service. Pandora now has more than 200 million users, the vast majority of whom use it free.

Apple is also said to be developing a Pandora-like Internet radio service, although its negotiations with record labels and publishers have been slow.

Google’s streaming service will not include a free tier, according to the people briefed on the plans. The subscription rate was not known, but was expected to be similar to that of Spotify and other competing services like Rhapsody and Rdio, about $10 a month.

To get the licenses it needs, Google has been negotiating with record companies for months — a slow process in any case, which sometimes takes longer in Google’s case because of its complicated relationship with the major record companies. While record labels now turn to Google’s YouTube for a big part of their promotional campaigns, the labels’ trade group, the Recording Industry Association of America, has criticized Google for not doing enough to combat online music piracy.

Google is said to have licensing deals for the service with the three major record labels: the Universal Music Group, Sony Music Entertainment and the Warner Music Group. Representatives of those labels declined to comment.

Making matters more complicated, the service to be unveiled this week is one of two parallel music services being prepared by separate branches of Google. YouTube, which last week introduced a few dozen paid video channels, is also said to be developing a music service. The details of YouTube’s service are unclear, but negotiations are said to be continuing with music companies.

Article source: http://www.nytimes.com/2013/05/15/business/media/google-set-to-introduce-music-service-to-compete-with-spotify.html?partner=rss&emc=rss