As predicted, Google unveiled its own all-you-can-stream music subscription service to compete with Spotify, Rdio, Deezer and MOG. It's a crowded space with challenging economics, but if anybody is well-positioned to win this game, it's Google. 

Google Play Music All Access will offer on-demand access to millions of songs for $9.99 per month, which is the same as every other music subscription service's premium tier. Unlike the existing market leaders, though, All Access won't include a free tier of access, a fact originally reported by the New York Times.

All Access will include "millions" — Google didn't say how many — of songs within 22 genres, a Google-powered recommendation engine, Pandora-style radio stations, editor-curated playlists and the ability to blend your own library with Google's. 

At first glance, it's a pretty compelling offering. If you sign up before the end of June, it will cost $7.99 per month. And that's just the first competitive advantage Google has over the incumbents. 

Google Is Already A Streaming Music Giant

Spotify is virtually synonymous with streaming music, but it's worth noting that Google is already plays a massive role in the discovery and consumption of music. These days, when teenagers want to hear a new song, they don't turn on the radio or buy a CD. They go to YouTube.

That's because the Internet's biggest repository of videos also happens to host millions of songs, which are readily available to stream for free. It's the world's biggest accidental music streaming service. 

With All Access, Google is making a far more official foray into  the streaming music space, having recently signed licensing deals with all three major labels in the U.S. It's not linked directly to YouTube and its massive repository of free music, but rumor has it that the video giant could get its own paid subscriptions for on-demand music. In the meantime, All Access is another attractive gateway into Google's content ecosystem, which hosts a hell of a lot of music. 

Google's Biggest Advantage: Being Google

The only reason we're talking about this new music service is because of who made it. By virtue of being a Google product, All Access has the potential for massive cross-promotion throughout Google's array of popular Web services.

More important, All Access will be built directly into the world's most popular mobile operating system. That's where the magic of streaming music really lies: In our ability to take it with us. It's why Spotify, Rdio and MOG all wager that the simple ability to access all that music on our phone is enough to convince people to shell out $10 per month. Spotify has done a decent job of proving that thesis by amassing 6 million paid subscribers at an impressive 25% conversion rate. 

Of course, Spotify, like Rdio and the rest of its competitors, has to compete for users' attention via app store rankings, social integrations and plain old marketing. All Access, by contrast will be much more front-and-center within the Android ecosystem. That's huge.

Who Needs A Business Model? 

Another advantage of being a Google product is that All Access won't have quite as much pressure to make money. Spotify and Rdio will ultimately need to find a way to profitability (or get acquired by a giant), something that isn't easy under the current economics of the streaming music business.

A company like Spotify will have to find a way to minimize its enormous music licensing costs, which are easily its biggest expense. Google's entrance into this space might make that harder, since the company can afford to pay out huge sums without investors holding the profitability gun to its head. 

Spotify and Rdio's other biggest challenge is converting paid subscribers. The streaming model, the theory goes, will work much better when there are many millions of people paying for services like this.

So far, Spotify has done the best job of converting those free listeners to paying subscribers. But with a competitively price competing service now shipping on hundreds of millions of handsets, the incumbents may have to get much more creative about courting subscribers. 

In a recent interview on WYNC's On the Media, technology journalist Tim Carmody suggested that this might be how the streaming music business will work:

Probably the most likely thing that will happen is that someone, whether it's an Apple or a Google or an Amazon or a Sony, comes along and essentially agrees that we’re gonna run music at a loss and we’re going to support it with these other businesses. How do you make money on the music business? Don't make money on the music business. That's the answer to that question.

That may well turn out to be true, but it's probably not quite what Spotify, Rdio and their ilk had in mind. 

All Access: Merge Your Library With Google's 

Last week, I wrote that as good as Spotify and Rdio both are, neither is perfect. Spotify's user experience could be better, while Rdio doesn't let its users upload or merge their own music. What I described as the ultimate streaming service would need to nail both design and music selection, at the very least. From the Google I/O stage, the All Access interface certainly looked nice, although I have yet to get my hands on it to try it out.  

The second part of that equation — the ability merge one's own library with a cloud-based repository of music - appears to be a feature that All Access subscribers will indeed enjoy. By launching alongside the Google Music cyberlocker first unveiled in 2011, All Access effectively allows users to blur the line between Google's library of licensed music and their own collection of tunes. 

One detail that was glossed over at Google I/O was exactly how wide of a selection All Access users will have. Rdio and Spotify both have about 20 million tracks in their libraries, which includes not just the major labels, but a partnership with indie label rights body Merlin and countless smaller labels. How many tracks does All Access have? The Google Music integration makes that question a little less crucial, but more casual listeners without hard drives full of MP3s will want to know when they're eyeing up $10 music services. 

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• Next Round In The Google-Amazon Death Match: Streaming Music
• The Ultimate Streaming Music Service: Just Merge Rdio and Spotify

Images by Nick Statt for ReadWrite

The unofficial leaders of the streaming-music market, Rdio and Spotify, are both awfully good services. But neither is close to perfect, which led me to wonder just how you'd create the ultimate online music service.

The answer isn't hard: Just merge Spotify and Rdio. Alternatively, the two sites should just copiously steal features from one another. Or someone could found a new service that blends the best of both. Whatever. I want the best of both, and I want it now.

Allow me to explain. Almost two years ago, when Spotify finally launched in the U.S., I signed up. Within 48 hours, I had canceled my Rdio subscription and agreed to pay Spotify $10 per month to access its service on my phone, ad-free. 

(See Also: How To Choose The Right Music Subscription Service)

But for the last few weeks, I've had the luxury of using a premium Rdio demo account, and I've gotta say: It's sometimes tempting to switch back. As impressive as Spotify is, Rdio is much, much better designed. On the other hand, Spotify has a few excellent features Rdio lacks. (Both sites offer approximately the same amount of music, which is often available via high-quality 320 kbps streams.)

Frankly, I'm torn. But I'd rather not have to choose at all. I suspect many other music fans — whether they know it or not — feel the same way.

What Rdio Gets Right: Design and Music Management

When it comes to design, Rdio wins, hands down. Spotify's apps aren't terrible, but Rdio sports what feels like a cleaner, more minimalist design. The blue and white color scheme is more refreshing and it feels like the company put some thought into typography. 

More importantly, Rdio organizes your music much, much better than Spotify does. It has long blown my mind that Spotify refuses to display your music library in a way that's at all analogous to how you'd organize music in real life. There's no collection. There is no "Albums" tab.  It's just playlists, starred tracks and search. If I find a new album I want to routinely listen to, I have to star the whole thing or add it as a playlist. It's bizarre. 

By contrast, Rdio lets me easily add albums to what is intuitively labeled my "Collection," which is organized by artist. To anybody who's ever used an iPod, scrolling through a list of artists is an familiar, almost expected interface. Spotify users, for whatever reason, don't have this simple luxury. 

Rdio's built-in music discovery is also superior. The "Heavy Rotation" tab recommends music to me based on what I listen to and who I follow on Rdio. Depending on those two details (especially who one chooses to follow), the suggestions can actually be pretty spot-on. I don't know what powers the "Recommended Albums" carousel in Spotify's "What's New" tab, but the fact that it thinks I'd enjoy Kelly Clarkson's new album suggests it's not paying very much attention.

What Spotify Gets Right: Add-On Apps & Infinite Music

What Spotify lacks in native recommendation features it makes up for via third party add-ons available through its built-in app platform. Spotify might not be aware of what I actually like, but Last.fm is — and its Spotify app is a mere click away. If I want music to match my mood, there's MoodAgent, which builds playlists based on things like tempo and the emotional qualities of a given song. 

For less robotic, more human-curated recommendations, there are apps like Hype Machine and Shuffler.fm, both of which corral the best new stuff from influential music blogs, broken down by genre. Then there are good, old-fashioned hand-picked recommendations from individual critics via the Rolling Stone, Guardian, Pitchfork or NME apps. 

Spotify's third party app platform is by far its most promising feature, aside from the music itself. Realizing that it can't build the end-all, be-all music service for every listener, Spotify has smartly opened up its platform to developers, who can use HTML5 and related Web technologies to build applications that plug into Spotify's vast music library.

These add-ons have yet to find their way into Spotify's mobile apps, but they continue to push the desktop experience forward in a way that makes it hard to break the Spotify habit. 

And Another Spotify Win: Imports

The other chief advantage Spotify offers — and that Rdio and others should just steal outright — is the ability to import your own MP3 collection into the service. This is a huge perk.

No matter how many licensing deals these companies strike, their music libraries are never going to include everything. There will always be big-name holdouts like The Beatles and Led Zeppelin, not to mention a score of smaller, independent artists who either haven't done the leg work to get their music onto streaming services or simply don't want to. 

Allowing users to effectively merge their personal music collections with Spotify's music library makes for an experience that feels more comprehensive and focused. As more of our music consumption moves online, the listening experience inevitably becomes fractured across sites and apps. We might not be able to avoid this entirely, but Spotify's integrated approach makes it easier to at least minimize the problem.  

There are, as always, technical limitations to implementing this feature. Since Spotify primarily exists as a desktop app, it can easily scan your hard drive for music tracks and index them, iTunes-style. The alternative would be to allow users to upload their tracks directly to the service, a la Google Music and the Amazon Cloud Player.

Waiting for thousands of songs to upload doesn't present the most compelling user experience, but it is one possible technical solution. For the most part, Spotify's local indexing approach works pretty well. 

Rdio has desktop apps, but they're more or less a clone of its Web interface without much extra functionality tacked on. If Rdio were to include the ability to import and manage music, I'd be that much closer to ditching Spotify. The desktop app is also a crucial component to syncing local MP3s to users' phones and tablets, another feature unique to Spotify in the U.S. (Deezer does this, too). 

Toward The Ultimate Streaming Service

Music is a pretty personal thing. If these companies want us to shift our listening habits into their respective clouds, they need to be particularly sensitive to what works for users. I've presented one framework here. Perhaps you have your own ideas, which I encourage you to leave in the comments. A flawlessly-designed, super-comprehensive, extensible and flexible music subscription service would be well worth the money. 

It's a little frustrating, because Spotify and Rdio collectively have most of the pieces required to build the ultimate streaming service. It's almost as if the two could merge and we'd be set. It'd be unlikely, but if this new hybrid music dream service could steal a page from Tomahawk's playbook and integrate additional music sources like SoundCloud and YouTube, it'd be even better. 

Whether or not Rdio, Spotify or any of its current direct competitors deliver this mythical dream service, somebody will. The music subscription space is going to heat up substantially this year, as Google and Amazon are both rumored to be entering this market. Meanwhile, MOG will be reborn as Daisy and Deezer is expected to launch in the U.S. 

We already have a few very awesome, yet imperfect music subscription services. As the space gets more crowded, there exists a real opportunity to launch something truly, thoroughly compelling. Who will it be? 

It's going to be an interesting year in online music. The all-you-can-stream music subscription space is set to heat up, with rumored Spotify competitors from Google and Amazon potentially in the offing and an already-huge European service called Deezer planning to launch in the U.S. 

In the meantime, there are already a number of music subscription services to choose from, depending on where you live. None of them are perfect. Spotify and Rdio generally the lead the pack, each with its own impressively massive library of music. Spotify wins points over Rdio for letting you import your own MP3s, whereas Rdio's interface design, especially on mobile, is vastly superior to that of any other offering.

Then there are solid offerings from Grooveshark and MOG, both of which face an uncertain future, for completely different reasons. MOG was acquired by headphone maker Beats Audio, which plans to launch a new service called Daisy this year. Meanwhile, Grooveshark has faced a barrage of lawsuits from record labels, who accuse the startup of copyright infringement, but remains standing... for now.

Which service is right for you? It depends on how much you value things like audio control, design aesthetics, music selection and user control. 

A year from now, the landscape may well look totally different and we'll be updating this post accordingly. For now, here's a comparison of the major all-you-can-stream music services. 

Spotify

Rdio

Deezer

Rhapsody

Grooveshark

MOG

Google is reportedly working on a music subscription service to compete with the likes of Spotify, MOG and Rdio. It might seem crazy to jump into a crowded market whose basic business model is already questionable – but for Google it makes perfect sense. 

The company is already a huge, albeit unofficial, player in streaming music. YouTube is now a top destination for listening to songs and albums, not to mention the trove of remixes and parodies that get uploaded everyday. Today, when teenagers want to hear a new song, they don't turn on the radio or buy a CD. They go to YouTube. 

There's good reason for that. First off, it's free. It also has an enormous amount of music. I've had premium subscriptions to Rdio, Rhapsody and (currently) Spotify. As extensive as those services' libraries are, there's lots of music they don't have. Whenever I can't find something on Spotify, I check YouTube and SoundCloud. It's usually there. Want to stream the Beatles from your phone? Their songs are all over YouTube, not Spotify. 

YouTube: The World's Biggest Accidental Music Service

If there was any question about the critical role YouTube plays in music discovery, it was answered last week when Billboard announced it will factor YouTube listens into the formula behind its Hot 100 singles chart. In a post-"Call Me Maybe" world, it's impossible to accurately analyze the popularity of a song without taking YouTube plays into consideration.     

Of course, the music-streaming use case is not quite what YouTube was designed for. It's a video site. It may work as a one-song-at-a-time music search engine to fill Spotify's gaps, but it's pretty poorly organized compared to existing music services. That's why Google Music is a more logical and likely home for this rumored streaming service, presumably with some cross-promotion via YouTube.

The fact that people turn to YouTube for music is something that evolved organically thanks to its user-generated nature and Google's willingness to pay licensing fees to keep the music playing. There's still plenty of copyright infringement going on, but Google is getting more aggressive about dealing with that. The RIAA may still complain, but more and more, Google is catering to copyright owners. Initiatives like this are exactly why the Plex is so eager to please the content industry.

Thanks to YouTube and the Google Music MP3 store, the company already has relationships in place with labels, songwriters and other copyright owners. But those existing partnerships aren't enough. The subscription-based streaming model is fundamentally different and requires unique, rather costly licensing deals.

Music Streaming Is About To Get Even More Crowded

If you think the music streaming space is crowded now, just wait. Deezer, a hugely popular streaming service now available in 182 countries, is in talks to launch in the U.S. sometime this year.  This summer, another much-hyped streaming service will go live, this time from Beats Audio, which acquired MOG last year.  Then there's the ongoing rumor about Apple taking aim at Pandora with an iTunes-based Internet radio product of its own.  

Exactly what Google's streaming service will look like is anybody's guess. That will depend in large part on what kind of content deals it can manage to negotiate. But the company is in a very good position to enter this space. After all, Google already has millions of streaming music users. It just needs to polish (and almost certainly rebrand) the experience and make it official with the major labels. 

Lead photo by Alexandre Normand