Google Music launched just 3 months ago, but CNET is already hearing from Google managers and record labels that the company is disappointed by the service's performance so far. In a nutshell: when Google Music launched, there were 200 million Android users, and that number was growing extremely quickly. The expectation was that it would be fairly easy to convert some of those users to Music customers. Unfortunately, that just isn't what's happened, with adoption lower than expected.
According to CNET, those involved with Google Music "aren't panicking"; it's only been 3 months, after all. But more importantly, Google has yet to go full-force with its major music push. With reports of a Google entertainment center right around the corner and the likelihood of some actual marketing behind the product and service, adoption is likely to grow. It's also worth noting that Google Music still doesn't have any tracks from Warner, and there's no word on whether or not a licensing agreement will be reached any time soon.
Personally, I'm not all that surprised with Music's disappointing uptake. Much like many of Google's recent product/service offerings that are still relatively new, the app and service are still mediocre at best. As for the app: it's ugly, missing a few features, still has problems syncing, and music still skips/stutters from time to time, even when it's playing off my class 10 microSD card. With uptake of the service so slow (and consequently, little need for streaming from it), it's no surprise that people turn to alternative solutions, be they built in with a manufacturer UI, from the Market, or included in a custom ROM. The app is akin to a storefront; even if you're selling something good, an ugly, unkempt, dilapidated storefront is going to turn a lot of people away.
Unfortunately, this store isn't selling something good - it's selling something mediocre. The service (and app, for that matter) still have some syncing issues for some users. Occasionally valid songs won't be uploaded for no discernable reason, and other times playlists just stop updating (or don't ever sync to begin with).
Two other factors contribute to the lack of success in my mind: first, Google needs to get Warner on board. Missing one of the big four labels is a big deal, and means people can never really use Music as their sole store. Second, the company needs to throw some marketing behind the service - it's still relatively unknown and unused by non-techies.
Still, despite all the problems facing Google Music, I'm optimistic on its outlook. If Google ever decides to get serious about Google TV and does properly release that entertainment system we've been hearing about (in addition to adding Warner), the problem would likely eventually sort itself out.
Then again, those are two very big ifs.