Google music service faces big hurdles--and rivals

But Google thinks there is still plenty to play for, according to people who have been close to its protracted negotiations with the music labels.

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"Music is low-hanging fruit; it's another reason for people to buy its Android devices," said Mark Mulligan, an independent industry analyst.

Google has negotiated U.S. deals with three of the four major music companies: Vivendi SA's Universal Music Group; Sony Corp's Sony Music Entertainment; and EMI. It has also signed deals with the increasingly influential independent label group Merlin and London-based Beggar's Banquet label group, home to the biggest selling artist of the year, Adele.

Warner Music Group Corp has yet to reach a deal as it is in early stage talks, according to another person familiar with the matter.

Google had previously launched its unlicensed Music Beta service in May to indifferent reviews.

With so many heavyweight competitors, one analyst said that Google can't simply offer a me-too service if it hopes to have any success.

"Google can't just meet the bar set by Apple and Amazon. They're going to need to raise the bar and come up with some sort of differentiation, " said Michael Gartenberg, an analyst with industry research firm Gartner.

But he noted that Google's track record taking on the entrenched online media players is not impressive.

"Just look at their ebook effort ... People just don't think of Google as a major ebook player at this point. So it's hard to see how they're going to disrupt music away from Apple," he said.

One new feature that might help Google Music in its battle to distinguish itself from rivals is the ability of users of its social network Google+ to share songs they buy legally with other users. Another user will be able to listen to a song at least once, three people said.