As a followup to my last post on Facebook’s push into music streaming, I thought I’d take a look at YouTube Music’s recent launch and Google’s push to make more sense of its disparate media-focused products as it tries to attract paying subscribers.
My takeaway: Google’s traditional "self-competition" strategy for launching and developing new products may doom its latest venture.
Google: Always Testing the Water
It is well known that Google has a love of testing and quantitative data in designing its products and services. (Who can forget the ever-popular “We Tested 41 Shades of Blue” story?) One of my favorite related theories is the “Google Makes Two Of Everything” theory. As this article notes, Google has a history of making simultaneous bets on competing products or technologies — Android Wear and Glass, Gmail and Inbox, Maps and Earth. Sometimes both products are a success (like Android and ChromeOS); sometimes the products are each failures (Google+ and Orkut…).
In the event where both products fail, it may be that Google’s lack of focus costs them substantially when they are up against an established, well-run competitor that is equally data focused. When it comes to social products, this was clearly the case — as Fortune explains, Facebook’s success essentially forced the dismantling of Google+. That same article points out some crucial lessons for entrepreneurs in the wake of the failure:
“Don’t sell people what you already have... Know who you are… Don’t compromise your core business.”
These are valuable lessons for startups and undercapitalized companies struggling to find product-market fit, but Google’s core business of search secures the company itself against any short-term failure. Each additional product launched through existing Google channels is an opportunity to gather data about their consumers — meaning they can take a longer view on product design and market success.
But this is not always a winning strategy. If the products being designed are targeted at consumers whose needs have long been underserved, Google can afford to take its time in developing strong products and business models. When it comes to social, however, Facebook simply launches better products and solutions faster for users who want to share, follow, and connect. They’ve learned from Google’s example on data-driven methods — and from Google’s ambition. Now Google’s failure on social products has led to Facebook finding a foothold, and their success may cost Google its core businesses of advertising and search.
Google’s Messy Media Products
Despite Lifehacker’s valiant effort, splitting Google’s media product offerings into just two competing services (Music+Red vs. Google Play) isn’t even realistic. Beyond that, it’s not clear from Google’s marketing which services you get from paying for which product. As of now, downloading YouTube Music gets you a free two-week trial to YouTube Red, which gets you ad-free playback and offline listening, but only for videos, and Red comes bundled with Google Play, but Play is also bundled with YouTube Red. This all replaces YouTube Music Key, but Red isn’t its own standalone app, while YouTube Music is, and then there’s YouTube Gaming…
(I had severe difficulty writing that paragraph, so it’s very understandable if you had trouble reading it and understanding it.)
The point is, Google is asking consumers to give up other streaming music subscriptions to come try out an ostensibly new service, for only a two-week trial (versus Apple Music’s 3-month offer), on a platform that really only has utility if you’re paying for the underlying YouTube Red service. Using YouTube Music without Red means no audio-only mode, no offline mixtapes, no features that actually make it feel like a music product — or at least not one positively differentiated from Google’s existing offerings. YouTube Red itself is kind of a mess, due to the lack of a standalone app and an inability to host some important content on its no-ad subscription-based tier.
With music, Google has stuck to its existing strategy of launching competing solutions and learning from the resulting feedback and data. As TechCrunch noted in its initial YouTube Red launch story:
The service makes a lot more sense than Google having a slew of limited subscription services with restrictions as to what you could access. The company says that watching the YouTube Music Key beta, it learned that users didn’t want to be told what was considered “music” and would be ad-free, and what wasn’t.
Wonderful. But should it really have taken Google one failed product and a long-term beta to reach this insight? And why didn’t they consider the cost of confusing their users in the meantime?
Made in Google’s Image — and Now Beating Them
While Google set the standard for the 21st century, they seem to have underestimated the competition. The landscape surrounding Google is not what it was for the first decade or so of this millennium. Companies like Spotify and Netflix (in addition to Facebook) have heavily data-informed processes and strong independent brands in the media world. Consider Spotify’s investment in analytics powerhouses and Netflix’s commitment to recommendation. What was once Google’s advantage is now the industry standard, and its weakness — coherence in product and marketing — is being exploited.
Google moves methodically, as befitting a 60,000 person company, but media is evolving faster than ever before. Mobile is already dominant, AR and VR are pushing into the consumer market, old players are dying and mobile-only ad-supported media platforms are finding huge valuations (see: Snapchat).
Spotify and Netflix are demonstrably nimbler, and they’ve already solved one of media’s biggest challenges: extracting value from the consumer. And with their strong product features and excellent discovery and recommendation engines, they are providing more value back to the consumer for their time spent on the service. While YouTube still wins on community, Facebook is challenging Google directly on social and now video as well.
The competition is mounting for Google, and its old methods of self-competition and disruption won’t work in this new, more intelligent tech media landscape. The time would be now for a coherent, standalone streaming music offering — but YouTube Music isn’t it.