Google’s New Route to Your Wallet: Music and Books
Michael Wolf- Friday, September 17, 2010
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Image Source: flickr user Jsome1
Amid talk surrounding the epic Apple-Google app store battle, many have overlooked Apple’s main advantage going in: the direct billing relationship with consumers thanks to iTunes. When its App Store launched, Apple already had tens of millions of credit card relationships with customers that translated into hundreds of millions (maybe even billions) of dollars in app sales with the release of the iPhone.
Google, despite its wide reach into our digital lives, has spun its wheels attempting to gain a foothold in the world of paid content (not to mention a direct billing relationship with consumers). It’s not for lack of trying either. Google has long created platforms through which it could conduct billing relationships, from attempts to monetize video to building a competitor to Paypal to the Android market.
The results of those previous efforts, among others, have been mixed. But Google’s latest strategy takes a hard and direct hit right at the core strengths of Apple and that other king-of-paid content, Amazon. The new entry point to your wallet: music and books.
Google’s Competitive Wedge: The Cloud
Google’s bet is that a cloud-based strategy for music and books will give consumers more options while at the same time free them from reliance on specific hardware-centric platforms. With this in mind, the company will make a significant play in the next six months for your digital dollars.
This week’s news about Google’s cloud-based music locker service shows the company is going full-steam ahead into digital music. It plans to take advantage of the continued reliance iTunes users have on physical hard drives and use that fact against Apple as a competitive wedge into the market.
In books, the company is edging ever-closer to launching Google Editions, the bookstore for its long-gestating Google Books initiative. Here Google plans to be both a consumer-facing (and billing) storefront and a back end for bookstore affiliates (where it would also manage billing). The company’s aim is to go beyond Amazon’s Kindle hardware- and app-based software strategy — which ultimately relies on local storage from devices — and offer books instantly to any device with a screen and a browser.
But Will It Work?
The key question is whether or not these increased options will compel consumers to buy from Google. The answer is possibly, but gaining their loyalty will be an uphill battle. Consumers are notoriously fickle about who they give their credit cards to, and it seems once they begin to trust a brand around a certain market — as is the case, for example, with iTunes and music — it’s hard to dislodge this trust.
Add to that the fact that the entrenched incumbents — especially Amazon — will move swiftly to counter Google’s advances. If you have any doubt that Amazon would launch its own books-through-browsers strategy to compete with Google, just look back at how fast it pushed out iOS apps and dropped prices on the Kindle (including a new generation of hardware) to counter Apple’s entree into the e-book market.
But Google’s biggest enemy in its expansion to the consumer wallet may be a growing unease with the amount of power currently in Google’s hands. The company has increased reach across all aspects of our lives and made many of us heavily reliant on it for search, email, communication and, soon, TV. Owning our bank and credit card information is a bridge we may not want to let Google cross.
