World Exclusive - "Google Music expected to launch next month"

The Guardian confirms 'Search giant understood to be close to unveiling its first music service in bid to rival Apple's iTunes'.

Google is understood to be a month away from unveiling its first music service, which will combine an MP3 download store with a cloud storage system set up to allow people to store songs remotely and play them back on multiple devices, according to sources in the music industry.

The search giant has signed up fourth music major EMI and is in serious negotiations with market leader Universal – who together account for a third of all music worldwide. Sony Music and Warner Music, the remaining two majors, are also in talks with Google, although as yet neither are understood to be close to signing up.

Andy Rubin, the head of development for Google subsidiary Android, told a conference in Hong Kong that "I think we're close" to launching Google Music, and added that the service would have "a little twist – it will have a little Google in it. We won't just be selling 99-cent tracks."

He offered no timing for the launch, but sources in the industry indicated they believed Google Music would emerge in November. Universal acts range from Lady Gaga to U2, with the smaller EMI holding the rights to The Beatles and Pink Floyd.

The cloud storage service roughly mirrors Apple's iTunes Match, in that it will scan a computer hard drive for all the music stored on it – whether paid for or pirated – and will make those songs available to be listened to legally from the remote services. Music executives are enthusiastic about the idea because it gives consumers an amnesty for all previous illegal copies or downloads.

However, some of the music majors are keen that Google charges for its matching service, amid concerns that they do not want to see the search engine dramatically undercut its competitor. Apple charges consumers $25 a year cash – the service is only available in beta in the US – which in turn largely goes to the record companies as royalty payments, as a partial indemnity for years of piracy.

Google is aiming to sign up worldwide agreements with the music majors, although music executives believe that the company is most likely to offer Google Music in the US before expanding the offering to other countries, including the UK.

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