Universal really wants to slap Apple across the face and stick it to iTunes in a big way. After recently declaring it wanted to punish iTunes for its success, Universal is ready to go to war.
So, how does an old-school music industry dinosaur like Universal deal the too-cool-for-school, #1 US online music retailer a black eye? By teaming up with the top Internet search engine on the planet; Google.
The proposed business arrangement was announced last week, but a few details have since come to light. G ’n U want to create a business called gBox, designed to undercut iTunes’ prices by selling songs for 99 cents each.
But Wayde, that’s the same price Apple sells music for on iTunes, 99 cents per song!
Very perceptive! But the difference is that gBox will sell DRM-free songs for 99 cent apiece, thus underselling iTunes by 30 cents per song for its DRM-free offerings.
So, what is Google’s role in selling music online with Universal?
Good question! Google will do what it does best, by playing the role of advertiser. Universal will buy Google ads for queries pertaining to artists and songs. The search results will take you to gBox where you can buy your music directly from Universal Music.
It’s an interesting arrangement and we won’t have to wait long to see it in action. They’re set to roll out the service on August 21st 2007.
Before you begin questioning Google’s motives and comparing them to the next Empire that just keeps growing and putting its hands into different markets, remember that all Google is doing is advertising. That’s exactly what the company has been doing for some time now. The arrangement is quite conservative from Google’s standpoint and closing the deal probably consisted mostly of fixing a price with Universal for its services. Universal is the one making the money from sales and thus taking the risk by buying advertising from Google.
And if Universal is underselling iTunes with DRM-free music, I say to Universal – good on ya’ mate!