Google Music struggling as user numbers keep on dropping

Google Music, which was made available as a beta back in May last year, and officially launched as a full product in November, doesn’t seem to be doing very well. With cloud integration and social features, and offering both streaming and purchase options, it was hoped that the service would be a big hit with Google’s installed user base, particularly the tens of millions of users with Android devices – but a few months after its official launch, reports suggest that it’s performing well below expectations.

Last week, CNET revealed that numerous insiders had disclosed that users weren’t flocking to the service as hoped, and that revenues were disappointing enough to concern the music labels that had signed up to offer their content.

Google’s position, according to the same sources, is that while its Music service hasn’t yet gained much traction, it will do so “once Google implements its hardware strategy”. There have been reports that Google is planning to build its own consumer devices, such as the Android-powered heads-up display glasses that we reported on recently, and a home media hub designed to stream music wirelessly, as revealed by The Wall Street Journal.

After just one quarter of full availability, it’s certainly too early to be writing off Google Music as a failure just yet, but a new report from music industry veteran Wayne Rosso suggests that things are much worse than has so far been reported. Rosso spoke with a “highly placed digital music executive”, who told him that Google Music has been consistently losing users since its full November launch. The source is quoted as saying: “I’ve never seen anything like it. It’s astounding. It’s hard to believe that with an installed base of over 200 million Android handsets, they’re actually losing customers.”

The music labels are said to be concerned by the weak performance of the service so far too. Google’s managers have reportedly attempted to reassure the record companies by referring to its hardware strategy (which it hopes will boost user adoption rates of the service), and by emphasising that Google will spend more on marketing Music once that strategy is in place.

If that’s true, though, it raises the question of why Google would launch the Music service without any real promotion behind it, and before the other pieces of its strategy were ready.

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