Apple Inc. (AAPL), Google Inc (GOOG): Who Has The Pressure Now?

iTunes captured 63% of the digital music download market last year, but growth in that market is slowing. The average iTunes user spent 40% less on music last quarter compared to the first quarter of 2011. And while digital music revenues grew 12% last year, subscription services grew 44%.

Apple’s product will inevitably create a stickier product ecosystem, but that’s not the goal for Apple. It already has an extremely loyal user base. Apple is actually fighting for more music revenue.

Google’s product isn’t particularly better than Spotify’s or its other competitors, but its reach is much greater with nearly a billion Android phones activated around the world. Similarly, Apple will rely on its 500 million itunes users to popularize its streaming model.

But Apple, more than Google Inc (NASDAQ:GOOG), will need to give users a reason to switch from Spotify, Pandora, or whatever streaming service its users currently subscribe to. These are the companies cutting into its music revenue and its image in digital music.

What to expect

Google Play Music All Access isn’t groundbreaking. It’s nothing that will completely change the industry or generate a ton of revenue for Google Inc (NASDAQ:GOOG). I see it as a service that will keep users loyal to the company – something it’s struggled to do compared to Apple.

Apple will release its own service too. Whether the product is evolutionary or revolutionary will be scrutinized and analyzed as more details leak. The pressure is on Apple to create a better product – a reason to choose them. It doesn’t have the first mover advantage this time around.

The article Why Google Started Streaming Music originally appeared on Fool.com and is written by Adam Levy.

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