The details on the new Google venture are still sketchy, but this is an interesting point about why Google's not likely to get away with a free music model in the US. It's also an interesting reminder about how Google's expansion into China forces the company to straddle two worlds.
Consider their Chinese service, Top100.cn: The free, all-you-can-eat model makes sense there, where download piracy rates approach 100% and music industry revenues, despite massive listenership, don't even touch $90 million dollars. in that context, Google's projected $14.6 million in ad revenue counts as a victory.
But here, the music industry sees ten billion dollars pass through its hands on a yearly basis, and people still (occasionally!) pay for music. Even assuming higher per-click ad values, it's hard to see how Google could just give full downloads out for free. Maybe it could stream, like Spotify? Or, you know, just sell music, like iTunes? Techcrunch doesn't seem to have much in the way of leads on this, but they leave it here:
Sony should offer a site with everything they have -- music, movies, books, etc., for a fixed price per month, like NetFlix. You'd keep your subscription to get the latest stuff. That factor would keep the thing viable even if lots of the content were copied.
If their delivery system were better than BitTorrent, and prices were reasonable ($20/month), a lot of people who pirate would go there instead. If you've ever tried it, you'd know that Torrent-ing a movie can take days before the entire thing downloads.
I've been using NetFlix streaming for a lot of content recently, and have no complaints.