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Streaming Music: The New Internet Battleground

Jonathan Nackstrand | AFP | Getty Images

For the first time in this century, the music industry may have a winning hand. It's at the center for the battle for consumers—Twitter, Apple, and Google's YouTube all are reportedly working on streaming music services, joining the likes of Pandora and even Microsoft.

Why are they jumping on this bandwagon? Because music is mobile, social, and everywhere. And these giants know that whichever service wins over consumers' listening habits has an advantage in the fight to control the operating system of users' smartphones.

Twitter, Apple, and YouTube all seem to be taking note of the fact that Pandora has 68 million active listeners who streamed 1.4 billion hours of music last month. Bottom line: People listen to music on every device, virtually all the time.

(Read More: As Music Streaming Grows, Royalties Slow to a Trickle)

And music consumers are valuable. Nielsen reports that music fans spend more than $420 each annually on music. Because services like Spotify and Pandora are so easy and useful, they're finally starting to trump piracy. Music revenue is growing for the first time since 1999, according to the International Federation of the Phonographic Industry.

Twitter is already a force in music. #NowPlaying was the most-used hash tag last year and the four most-followed people on the service are musicians. So it makes sense it would want to build a personalized music app around the music discovery service, called 'We Are Hunted,' it acquired last year. Twitter can leverage all that information about what people are listening to in order to better target ads, sell individual songs or sell a streaming service tailored to listening preferences.

(Read More: A 'Golden Age' for Music Dawns)

Apple and YouTube both have a massive advantage when it comes to launching streaming services. Apple is now negotiating terms with the music labels, looking to tap into the power of its iTunes store and its devices. YouTube is already a go-to destination for music—for its music videos.

All this competition is a big win for music labels and artists—they now have new revenue streams and leverage after Apple dominated, and dictated terms, for so long.

(Read More: Mobile Wars: Pandora's Got Frenemies)

We'll have to see how the new services turn out and when they launch. One thing's for sure: This explosion of choice is great for consumers.

—By CNBC's Julia Boorstin; Follow her on Twitter: @JBoorstin

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  • Working from Los Angeles, Boorstin is CNBC's media and entertainment reporter and editor of CNBC.com's Media Money section.