Megatrax Blog

Industry giants are still limping towards streaming music online, and Peter Kafka seems to be the man with his finger on the pulse of the issue.

In an article Monday for Media Memo on All Things Digital, he speculated that Apple’s big announcement this week (which turned out to be that the Beatles are now available on iTunes) might be about a subscription service that would allow users to stream music. He said:

It’s easy to understand why Apple might head in that direction: Generally, because it seems inevitable and because Google has been talking about doing something similar. And specifically, because Apple has that shiny new North Carolina data center to play with.

But the music industry sources I’ve talked to so far today don’t know of any new deals between Apple and the big music labels. So that would rule out a new subscription service, which would definitely require a new rights deal.

And that also makes it very unlikely that Apple does the next best thing: Letting users upload their iTunes catalog to the cloud, and letting them access it anywhere they want.

Does Apple have to get a special deal with the labels in order to do that? Not necessarily. Some start-ups are offering similar services, without a deal (though one of them, MP3tunes, is getting sued).

And over at Warner, moving towards streaming music has been slowed by Google’s progress and the contract issues related to bringing Spotify to the US. Says Kafka in a Media Memo piece today:

The good news for Warner Music Group: Digital revenue growth,anemic earlier this year, has perked up a bit. The bad news: It’s still not enough to counter dropping CD sales, which continue to account for the majority of the industry’s revenue.*

And while Warner, and the rest of the industry, had been hoping that Google might launch a music service that would give sales a boost this year, that doesn’t look likely. The new hope: Google arrives sometime next year.

That’s the line from Warner CEO Edgar Bronfman Jr. during his company’s earnings call this morning. Bronfman said he’s hoping that Google and other services “will come online in calendar 2011,” and that they’ll create “very significant opportunity both for consumers and the music industry.”

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*You really can’t stress this point enough: We’re a decade past Napster, but the music industry still runs on CD sales. In Warner’s case, digital now accounts for 25 percent of overall revenue.

The issues working against streaming or subscription music services in the US are significant, despite it being available elsewhere in the world. If you’ve been able to sample streaming music services abroad or have tried any of the few that have taken breaths in the US, please share your thoughts in the comment space.