Google’s Reportedly Launching A Music-Streaming Spotify Killer At I/O This Week

Google is ramping up to deliver a streaming music service, which could debut as early as tomorrow at the I/O keynote, sources have told The Verge. The report has since been picked up by other publications, including The New York Times, which confirms that this is indeed the case according to its own unnamed sources, “people briefed on the plans.”

That Google would be working on a streaming, Spotify-style music service should surprise exactly no one. It’s been the elephant in the room among the major purveyors of digital music, including Apple, Amazon and Google ever since Spotify and competitors like Rdio emerged and started picking up steam and adding users.

Neither Spotify nor Rdio have come anywhere close to unseating the big guys in terms of users or music revenues, but that doesn’t mean that Apple and Google haven’t noticed the growing trend towards streaming. Juniper Research said recently that streamed music revenues will grow by more than 40 percent in 2013, rising to $1.7 billion by the end of the year. That’s still peanuts compared to the revenue Apple alone drives from iTunes music sales each year (it paid out $3.4 billion to record labels in 2012, which is after it takes its own cut).

The Google streaming service has been in development for a while now, according to rumors, but negotiations have now progressed to the point where it’s ready to launch, with all three major record labels signed up. There won’t be a free option, says the NYT, but instead there will be a paid subscription available at or around the going rate at competing services, or roughly $10 per month.

If true, this means Google’s negotiations with streaming services have progressed far faster and further than Apple’s, which reportedly hit a snag earlier this week. Both Apple and Google had previously raced to introduce cloud-based digital locker services for Google music, which allowed people to access tracks they’d previously purchased remotely from a variety of devices rather than stream tracks Spotify-style. That seemed like a sure precursor to a true streaming service, but labels were reportedly reluctant to go all-in on that model originally.

The strangest thing about this is that Google is reportedly still doing the YouTube-based streaming music service that had previously made the rounds, in addition to this new one, which will apparently operate alongside it. How these work, especially in terms of what they give users access to and for what cost, should provide an interesting look at how Google is looking at dividing its media business efforts.

We’ll likely find out tomorrow if this Google streaming thing is for real, live at the I/O keynote right here on TechCrunch.