Google and Universal tunes into GBox

Ok, not an original title, and makes me think of the older boom boxes, but maybe this will not be such a bad idea, and this is one of the few things that the industry does not have a solid grip on. The problem is that Apple created a monster with ITunes, and that every time they say the sold a billion songs, companies perk up and want a cut of the action. On line sales and delivery of music has fundamentally altered the music industry, and now GBox is stepping into the fray, which ought to alter a whole lot more over time.

The key to this is that Universal is going to buy ads on Google, and Google will then send the traffic to GBox, who then tries to sell the tunes. While Google only gets a cut of the advertising deal, and not the music sales itself, the three tiered approach to denting ITunes should be interesting to watch.

Under the program, GBox will get referrals through ads Universal will buy through search leader Google Inc. GBox Chief Executive Tammy Artim said Friday. Google will get standard advertising fees rather than a cut of sales under the arrangement. The ads, which would appear when a Google user searches for specific terms such as the name of an artist, will direct the user to gBox. Source: Forbes

The even better part is that some of the tunes will be DRM free, and still be 99 Cents according to Gizmodo. This will undercut ITunes pricing schema, and tick them off at the same time. This will also force apple’s hand to renegotiate the music on ITunes, when they will not be an advantageous position as they have been in the past.

The music industry is playing a classic divide and conquer routine here, and depending on where Apple goes with this one, and how well GBox performs, if it can even dent ITunes at all remains a good question. GBox does not have the infrastructure of devices that ITunes has, that might end up being the liability that other music stores on line have had in the past. The no DRM option is a good sales point, undercutting their first best major supplier of music might be something that the music industry will regret.

All this hinges on how well GBox does in the future.