Two months after it was first rumored, Facebook is ready to reveal its new Facebook Music service. A report at Tech Crunch shed more light on the service, which will have support from some of the digital music business’ biggest players, on both the digital sales side and streaming Internet radio businesses.
Facebook Music will be supported by Spotify, the U.K.-based Pandora (NYSE:P) competitor that only just opened its own service in the U.S. this summer, as well as MOG and possibly Turntable.fm, music-based social networks. And Amazon (NASDAQ:AMZN) might be involved as well. Other supports include streaming music service Rdio. With this many partners, Apple (NASDAQ:AAPL) and its iTunes business might be the only digital music maven not supporting Facebook in its musical ambitions.
The service’s features are less surprising than its content partners. Tech Crunch‘s sources indicate that users will have access to “scrobbling,” a prominent feature of CBS‘s (NYSE:CBS) own online music service, Last.fm. Scrobbling lets people listen to a song and have a link to it automatically posted to their profile page, inviting their contacts to listen, as well. The real hook of Facebook’s service is that it will unify all of those other services as well, so a song listened to MOG or Spotify will show up on a Facebook contact’s Rdio page. It will create a type of broader ecosystem for the Internet radio business.
What does it mean for business? For starters, it should only increase Facebook’s clout as a display advertising powerhouse. Prospective ad buyers will have even more reach into music audiences through Facebook. Even with a base level of more than 750 million Facebook users, that new access is good for advertisers looking to target niche groups. It also represents a blow to any services that choose not to partner with Facebook.
It won’t be clear who is and who isn’t teaming up with Facebook until the social network announces more details at its F8 conference in San Francisco later this week, but it should be worrisome for Pandora shareholders that its company hasn’t been mentioned as a partner yet. The last thing Pandora needs is more bad news. Google (NASDAQ:GOOG) also should be mildly concerned about the service. The still-in-testing Google Music and its inevitable integration into social network Google+ would have made it attractive compared to Facebook, but now with such similar offerings, Google will be forced to find yet new ways to distinguish its fledgling network.
Should Apple be worried about Facebook Music? Not as of yet. iTunes and the new iTunes Match storage service opening this fall as part of the iCloud initiative are services based around music sales, not streaming service, whose revenue is advertising or subscription-based. And Apple already lost its chance to make a music social network when it opened the Ping network through iTunes in 2010 to almost universal jeers.
That isn’t to say Apple won’t have to worry about Facebook in the future, though. Word is Facebook company also might start offering music downloads in exchange for Facebook Credits, its virtual currency. That might not happen for some time yet, though. For now, it looks as though Facebook simply stands a good chance of becoming the bright center of the Internet radio business.
As of this writing, Anthony John Agnello did not own a position in any of the stocks named here. Follow him on Twitter at @ajohnagnello and become a fan of InvestorPlace on Facebook.
