"We believe that Google is in the midst of creating its own iTunes competitor, which we've dubbed 'Google Tunes.' We think this is a logical step, now that the nascent Google Video product has been introduced," Peck wrote in a research note. "We note that Google has not confirmed our expectations, and that our thinking is based on Mosaic theory. However, we do think this fits with Google's recent moves and its ultimate goal of organizing the world's information."
This is why I don't pay attention to stock analysts except for analysts like the ones at Motley Fool. There is a big difference between the video download and music download markets. First of all, the music download market is already mostly controlled by Apple and their control is not just in the sale, but the playback area as well. Second, the key to controlling the music download market is the integration between every phase of the process from the sale to taking the songs on the road. Given the fact that the iPod is the most popular product for taking songs on the road, and it's controlled by a company that would be incredibly hostile to Google, they would be mostly locked out of that component which has hitherto been shown to be critical to promoting online sales. Finally, Google would have to find some way to sell videos in a way that is cost efficient and provides the ability to exceed the playback capabilities of Apple's offerings, and to do that, their movie download software would have to support burning straight to DVD which not even Apple provides yet.
At this point in the game, Google has too much competition its way and too little good will in certain areas to get such a service off the ground. Their apathetic, bordering on hostile, attitude toward book publishers over their book search service has undoubtedly not gone unnoticed by the movie and television studios and I doubt that they'd rather deal with Google than Apple at this point given the differences in attitudes between the two companies. Besides, Apple already has the infrastructure in place to get the ball rolling on a full-blown video store and are even now selling a lot of tv downloads. If the studios are barely prepared to get involved with Apple, why would they get involved with Google at this point?
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