MP3tunes boss Michael Robertson is stirring again, this time digging into Apple’s likely strategy for its iTunes Store in a guest post for tech blog TechCrunch.
“Leveraging their ubiquitous iTunes software Apple plans to upgrade their users almost overnight to a cloud music service in an ambitious move to beat Amazon and others to a cloud music service,” he writes, saying that the strategy is also designed to “sidestep new licenses from the major labels”.
He predicts that recently-acquired Lala will be crucial to this strategy, NOT because of its 10-cent song streaming rental model, but for its music locker technology. “An upcoming major revision of iTunes will copy each user’s catalog to the net making it available from any browser or net connected ipod/touch/tablet.”
What, you might think, does this mean for existing music locker companies like, well, MP3tunes?
The Wall Street Journal is claiming that Google was in “serious discussions” to buy Lala before Apple acquired the company last week.
The article suggests that Google has deeper ambitions in the music space than its recently-launched music search service – possibly tied into giving people a way to stream music to netbooks running its Chrome OS platform. Meanwhile, Apple was apparently interested in buying mobile advertising company AdMob before Google acquired it last month for $750 million.
The picture painted is of two companies increasingly muscling in on one another’s turf – with startups caught in the middle (although if this means bidding wars, it’s not such a bad place to be caught). The question now is whether Google will buy another music startup instead…
Since news broke that Apple was buying streaming music startup Lala, various journalists and commentators have been trying to work out how much the company paid.
All Things Digital cites multiple sources as saying the price was $80 million, but TechCrunch’s entirely separate multiple sources say it was nearer to $17 million. Both agree, however, that the deal is less about turning iTunes into a cloud-based streaming music service, and more about Lala’s personnel.
“LaLa was acquired mostly for the star engineering team and the awesome recent Google deal more than for the product,” says TechCrunch. “Lala’s real asset was its technology team: In the end, Apple bought the company to get its hands on its engineers,” agrees All Things Digital.
Furious speculation on Friday evening has seemingly culminated in Apple striking a deal to buy streaming music firm Lala.
Reuters, the Wall Street Journal and All Things Digital are reporting it as a done deal, although Apple has not officially announced the acquisition or its intentions. “Apple buys smaller technology companies from time to time and we generally do not comment on our purpose or plan,” says spokesperson Steve Dowling.
So what is the thinking behind the deal, which follows MySpace’s acquisition of iLike and Imeem in recent months? That could be one reason: Apple reacting to MySpace’s increased focus on music and media, rather than its social networking battle with Facebook.
Meanwhile, one source tells Reuters it’s a sign of Apple’s intention to add streaming capabilities to iTunes. “Apple recognizes that the model is going to evolve into a streaming one and this could probably propel iTunes to the next level,” says the source.
Lala doesn’t have a huge customer base – about 100,000 users – so it’s pretty clear that technology and deals are the keys here. It recently signed deals with Google and Facebook to provide, respectively, music search results and music as virtual gifts.
Lala is also developing an iPhone app – it’ll be interesting to see what happens to that now, and indeed to Apple’s current policy of allowing streaming music services to launch apps for its iPhone and iPod touch.
The speculation last week about Google’s music search plans was pretty much on the money. Announced officially last night, the company’s new search features will provide streaming previews when people search for song titles or artists – or even specific lyrics. iLike and Lala are the two main partners as previously reported, although the iLike element will be branded as MySpace. However, Pandora, Imeem and Rhapsody are also on board, providing links to “music related to your queries as well” – a recommendation element, in other words. The new feature is only available in the US for now. So how does Google decide which partner to serve links up for each query? A virtual coin toss, apparently.
It’s been a busy week for US streaming music service Lala, following news that it’s working with Google on a new music search service, and with Facebook on music gifting.
Now Wired’s Epicenter blog is reporting that Lala is also working on its own iPhone application, which will tie in with its website. That means users who’ve paid 10 cents for unlimited streaming rights to a song will be able to stream it on iPhone too for no extra cost.
The app will also provide access to users’ own libraries of music. It’s expected to be available by the end of the year – IF Apple approves it. Will it? Recent approvals of apps from Spotify and Rhapsody imply that Apple is fairly relaxed about letting streaming music apps onto the App Store – even from competitors.
However, if Lala wants to let iPhone users pay for streaming rights from within the app, it could face problems. Currently, the minimum in-app payment that’s possible on iPhone is $0.99.
Music streaming service Lala is developing its own iPhone app, according to a first-look piece on TechCrunch (video embedded above). It’ll let users stream any song from their Lala library, although there’s no firm release date set yet – apparently partly to finish the app, but also to figure out the legal and monetisation aspects.
Specifically, it’ll be interesting to see how a mobile app fits in with Lala’s business model of getting users to pay 10 cents for unlimited streaming rights to songs, and then 80 cents to download them.
However, another issue for the company may be the potentially big growth in users driven by an iPhone app – with streaming royalties being what they are, who wants millions of new users suddenly signing up to their service?
You should always stick to your guns, right? Well, not necessarily. Plenty of companies have rethought their business model or approach – and you can argue that this kind of flexibility is increasingly important, given the current economic climate. Here’s five music firms that changed something important – their business model, for example, or their user interface.
We7
UK-based We7 has always focused on ad-supported music, but the format changed pretty drastically in October last year. Originally, the company tacked audio ads onto music downloads. However, its new model is a more standard streaming music service with adverts in between the songs. They claim they’re not abandoning ad-supported downloads – it’s just that they thought the market wasn’t quite ready for them yet. Since then, We7 has focused on promoting its streaming service, revamping its site in the process.
Streaming music site Lala has relaunched with an innovative new pricing model for consumers.
Users can stream any song that they already own on their computer for free using the service, but must then pay $0.10 for a permanent licence for any other track they wish to stream.
Think of it as ”virtual ownership” – the user never owns the actual file, just the rights to stream it. Lala is also selling MP3 downloads for $0.89, or $0.79 to users who”ve already paid for the streaming rights.
Labels have welcomed the idea – all four majors are signed up – and Lala claims that in tests, 30-40% of people who paid for the ”websongs” ended up buying the MP3 versions too.
As a quick extra to our coverage of Warner Music Group’s latest quarterly results last week, the company’s official filing has put a number to its investments in music websites Imeem and Lala. WMG invested $15 (more…)
MP3tunes boss Michael Robertson is stirring again, this time digging into Apple’s likely strategy for its iTunes Store in a guest post for tech blog TechCrunch.
