Rather than launch its own digital music service, Google is considering whether to partner with an existing service, including the likes of Spotify, to power Google Music.
According to a source with knowledge of the talks, Google has told the labels that it has begun discussions with Spotify in recent weeks, though no agreement is in place. Spotify is the European streaming-music service that also has ambitions of launching in the United States.
The talks with Google and Spotify have coincided with an inability by Google to reach agreements with the four top record labels on licensing a cloud music service, the source told CNET. Google had originally hoped to launch a new music service by the end of the year, and then was aiming for March, but now it's indefinite on when it might debut.
Google declined to comment for this story. Spotify, however denied that it has spoken to Google about powering the company's service. "Nothing in it," said Spotify spokesman Jim Butcher.
So, the question is whether Google is trying to scare the labels into ceding better terms. All the major labels would like nothing better than to see another large distributor competing against Apple.