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Apple Buys Lala Music Streaming, But Why? 131

Posted by ScuttleMonkey
from the piles-of-cash-and-nothing-else-to-buy dept.
Apple has snapped up music streaming biz Lala in what many initially thought to be a move to step beyond the strict download market of iTunes. On closer inspection it seems that Lala was a somewhat less-than-ideal target and Apple may just be gunning for ready-made engineering talent. "On balance, the purchase appears to give Apple the chance to bring in engineers that will be useful now, and could be even more so if it chooses to enter streaming or subscription services. But, for the moment, there's nothing about the purchase that seems to provide the company with any key technologies it was missing in terms of diving into markets. Until another company demonstrates that there's money to be made (or iPods to be sold) through streaming, there's no reason to think that a move of this sort is imminent."
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Apple Buys Lala Music Streaming, But Why?

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  • Google (Score:5, Informative)

    by bill_mcgonigle (4333) * on Monday December 07, 2009 @02:38PM (#30355978) Homepage Journal

    Lala.com is the most frequent entry in the Google Audio search for searches I've done. If Apple can control Lala, they can largely control or hamper Google's competition against iTunes.

    Does there need to be a more complex explanation than simple competitive pressures?

    • "Competition is sin." -John D. Rockefeller

    • Lala.com is the most frequent entry in the Google Audio search for searches I've done. If Apple can control Lala, they can largely control or hamper Google's competition against iTunes.

      So Google owns a stake in Lala? First I've heard of it.

      • Re: (Score:3, Insightful)

        by Z00L00K (682162)

        No need to own a stake - sometimes a service is high on the search results anyway.

        But sometimes it's better to buy a relatively small service that has the right stuff and adapt it to your model. So we will probably see a promoted music streaming service from Apple - streaming to the iPhone and other devices.

        And the telcos will make a large amount of money from a streaming service to the iPhones. And especially for people who forgets about it and streams music while roaming. Can cause a phone bill the size o

        • by cayenne8 (626475)
          "And the telcos will make a large amount of money from a streaming service to the iPhones. And especially for people who forgets about it and streams music while roaming. Can cause a phone bill the size of a new car."

          Err...wouldn't my 'unlimited' data plan cover my streaming music anywhere I traveled in the US? Doesn't roaming only apply to voice....and I thought the TOS said I didn't get charged any extra for roaming either.

          Now, if you meant I left the country and was roaming internationally (not someth

    • Re: (Score:3, Insightful)

      by IANAAC (692242)
      Is Google competition for iTunes?

      I've honestly not ever heard that before.

    • by netruner (588721)
      It looks more like "market shaping" to me - streaming is a contradictory market strategy to the "pay per download" model that Itunes uses. If they can keep control of the market leader in that arena, driving out other startups until the business model goes belly up, they have not only eliminated a competitor, but any potential competitor of that type.
      • Re:Google (Score:4, Informative)

        by 99BottlesOfBeerInMyF (813746) on Monday December 07, 2009 @03:54PM (#30356934)

        It looks more like "market shaping" to me - streaming is a contradictory market strategy to the "pay per download" model that Itunes uses.

        Lala's business model incorporates pay per download as part of it, rather than contradicting it as you claim. You search Google and a link pops up. First listen is free for music discovery. You can pay a small amount each time to stream it successive times or you can buy it and download it as well as be able to stream that song whenever you want. It neatly incorporates the two models. A cynic might claim it eliminates the revenue from people repurchasing songs they downloaded then failed to backup and lost somehow, but I don't think that is a significant source of revenue for Apple. Rather, the goodwill from letting people re-download songs will make for happier customers, enhance the Apple brand, and lead to more hardware sales, which is where Apple makes the real money.

      • First, Lala.com isn't a very good service and overall it sucks. You can't do with it what you think. You can only have so many credits to repeat play songs. Otherwise you can listen to any song once and then you can buy the song if you so choose, which I believe is through Amazon (though I'm not positive). Hardly something worthy of shaping.

        • And now that Apple owns it, they can reshape the credits, change policies on song repeats (pursuant to licensing agency negotiations, of course), and move the full purchases from Amazon to iTunes.

          So this could be a way to land squarely in the market and start influencing it as it wishes. Perhaps Lala will be like iTunes itself: not actually meant to turn a profit, but to encourage people to buy iPods.

          • by Kalriath (849904) *

            And of course it will be changed to only be usable within the iTunes interface, and use Quicktime to stream the music. Yuck.

        • by jimharris (14678)

          Lala is near perfect in my book. And it's extremely easy to add $20 worth of credit to buy another 200 songs. Surprisingly it takes a good while to spend down the $20 if you only buy songs you want to play over and over again. I also have a Rhapsody subscription, but I most use Lala because it's more convenient.

    • by rm999 (775449)

      I wouldn't call them competitors, iTunes targets people who want to hear a song more than once.

      Also, Google still has plenty of music and music videos on YouTube.

    • by artemis67 (93453)

      But Google controls their own results engine.

  • "Immanent"? (Score:5, Funny)

    by abigor (540274) on Monday December 07, 2009 @02:39PM (#30355988)

    Ah yes, the purchase of Lala will not, therefore, make Apple present throughout the universe.

  • One Word (Score:5, Insightful)

    by Alcoholic Synonymous (990318) on Monday December 07, 2009 @02:41PM (#30356016)
    Google Search for any song online via Google and Lala brought a stream right to you. First listen is free, after that you have to pay. Why would Apple buy them? Considering most sane people use Google and Lala doesn't require something like iTunes, Lala was in a better position to bring music people want directly to them. This is just eliminating the competition before they got too big. Can I get an Antitrust Amen?
    • Re: (Score:3, Funny)

      by furball (2853)

      Do insane people avoid Google?

      • Re: (Score:2, Funny)

        by Anonymous Coward

        Do insane people avoid Google?

        No, they think they're 'googling' while in fact they're using Bing

    • Re:One Word (Score:5, Insightful)

      by Enderandrew (866215) <enderandrew@noSPam.gmail.com> on Monday December 07, 2009 @02:53PM (#30356168) Homepage Journal

      What if they want to just use Lala as a gateway for directing people to buy music off iTunes?

      People search for music. They get the Lala sample, and then iTunes swoops in for the sale.

      Seems very logical to me.

      • True. If anything, Amazon should've jumped in to grab them to push people to their MP3 downloads.
        • I don't see how Apple buying Lala precludes amazon from offering similar streaming. Nor does it mean that Google can't partner with Amazon to offer something similar. I agree that this purchase makes sense, but it seems risky to put forward the cash for something that relies entirely on google and affiliate links.
          • I agree that this purchase makes sense, but it seems risky to put forward the cash for something that relies entirely on google and affiliate links.

            Worse decisions have been made in Palo Alto/Mountain View before, so nothing shocks me anymore.

          • I don't see how Apple buying Lala precludes amazon from offering similar streaming. Nor does it mean that Google can't partner with Amazon to offer something similar.

            You're right, but this was my exact thought when Google bought YouTube. Anyone could build another service with the same functionality, so why should Google bother? Turns out it was a smart acquisition simply because YouTube was already so entrenched as THE place for video -- the BRAND was worth the purchase price, especially given the newer video advertising models (that are still somewhat being worked out).

            Personally, I never heard of Lala before Apple's interest. But based on what others have said, it

          • I agree that this purchase makes sense, but it seems risky to put forward the cash for something that relies entirely on google and affiliate links.

            Well, Lala probably has a contract with Google, which they will still have to honor. Beyond that, this gets Apple a jumpstart on any competition. And given they're sitting on 31 billion in cash reserves, more than anyone thinks is sensible, I don't see this purchase as too risky.

        • by Kalriath (849904) *

          I think we'd rather Apple did. At least Apple realises there is a "rest of the world".

    • Re: (Score:1, Offtopic)

      Google Search for any song online via Google

      Question: how do I google search offline and/or not via google? :)

    • Re:One Word (Score:4, Interesting)

      by 99BottlesOfBeerInMyF (813746) on Monday December 07, 2009 @02:59PM (#30356242)

      Google Search for any song online via Google and Lala brought a stream right to you. First listen is free, after that you have to pay. Why would Apple buy them? Considering most sane people use Google and Lala doesn't require something like iTunes, Lala was in a better position to bring music people want directly to them.

      That is probably the biggest reason.

      This is just eliminating the competition before they got too big. Can I get an Antitrust Amen?

      Umm, you don't know much about Lala do you? They admitted that they did not foresee any time in the near future where they would be profitable and as a long term investment were actively seeking someone to buy them to keep the service going. I doubt this will raise antitrust flags since Lala did not have significant market share and what they did have was primarily streaming.

      As for the other reasons Apple bought them, besides the Google deal... They have significant engineering talent, they have a solid subscription streaming solution which is missing from Apple's lineup and that solution scales into individual downloads which is Apple's main offering, and they have their service built as a Web service, where Apple has recently started expanding iTunes. In fact, one analyst (UBS ) has already been speculating this signals Apple being serious about making iTunes a Web service that will work with any device and a possible service to run out of Apple's giant new server farm. If so, that would be breaking the exclusive ties between the iTunes store and Apple's hardware offerings which would in fact get rid of Apple's biggest potential antitrust problem.

      • by guruevi (827432)

        The issue on the market right now is that there is no affordable, unified, high-quality, *legal* way of getting your favorite tv shows or tv channels on your iPod, iTunes, Mac/PC.

        The main issue seems to be that content providers don't want people to 'own' or control the show so they can watch it over and over again with limited/no commercials. IPTV in the US is as good as dead and it is a market waiting to be tapped. If Apple can lean it's weight against this and be the first to have a somewhat decent way o

        • by Macrat (638047)

          The issue on the market right now is that there is no affordable, unified, high-quality, *legal* way of getting your favorite tv shows or tv channels on your iPod, iTunes, Mac/PC.

          You have something against the iTunes store?

      • Re: (Score:1, Interesting)

        by Anonymous Coward

        Everyone's afraid of MySpace

        http://mashable.com/2009/10/28/google-music-search/

        “Now, when you enter a music-related query — like the name of a song, artist or album — your search results will include links to an audio preview of those songs provided by our music search partners MySpace (MySpace) (which just acquired iLike) or Lala. When you click the result you’ll be able to listen to an audio preview of the song directly from one of those partners. ... MySpace and Lala also provide

        • “Now, when you enter a music-related query — like the name of a song, artist or album — your search results will include links to an audio preview of those songs provided by our music search partners MySpace (MySpace) (which just acquired iLike)

          Why go to Myspace when Google does this directly? Also, iLike seems to hang and fail whenever I look at one of their previews.

    • Re: (Score:3, Funny)

      by uniquename72 (1169497)

      Lala was in a better position to bring music people want directly to them.

      This is precisely why Apple should purchase Pirate Bay.

    • I think the one word is "immanent"
    • Or maybe apple is paying for this... and will leave the site pretty much unchanged except change that "buy now" link to an itunes link. Or possibly even convert the site to "itunes streaming edition" and allow you to buy songs and stream them and then download them to your ipod or regular itunes if you want?

  • Perhaps for specific iPhone/iTunes streaming video?

    • by Esc7 (996317)

      I'm pretty sure this is exactly what is going to happen. I've heard rumors of them building huge datacenters for hosting media files and it looks like they're going to move your itunes library to the cloud. Combine that with the iphone and apple TV and you'll be watching movies on the ride home and then switch to the tv as soon as you get in the door.

      • Re: (Score:2, Informative)

        by ColdWetDog (752185)
        Right. Apple can't even keep Mobile Me up for more than a week at a time. It's slow, buggy and clumsy. All it does is email, file synch and host some pictures. They've been at this for several years now and really have yet to make it a quality product. Unless this is an attempt to hire some competent people in the 'cloud' business, I don't see it.
    • by lwsimon (724555) <lyndsy@lyndsysimon.com> on Monday December 07, 2009 @03:29PM (#30356610) Homepage Journal

      Your post makes AT&T's network cry.

  • by znu (31198) <znu.public@gmail.com> on Monday December 07, 2009 @02:49PM (#30356116)

    The initial NYT article about the acquisition said it was only talent related, while a more recent Reuters article [yahoo.com] has the following quote:

    A source familiar with the matter said the iPod, iPhone and Mac maker is seeking new ways to expand iTunes to move it beyond being a predominantly download service for songs. The source asked not to be named.

    "Apple recognizes that the model is going to evolve into a streaming one and this could probably propel iTunes to the next level," said the person.

    The truth is, nobody really knows what Apple is up to. Which is, of course, just how Apple likes it. I wouldn't put it past them to have deliberately leaked a couple of conflicting stories just to keep everyone guessing.

    • I wonder if Apple has tried to get better streaming licenses and was rebuffed, given how the industry distrusts their domination of the online distribution market.

      Lala might have been a relatively cheap way to acquire long-term streaming licenses, since the Lala contracts likely don't include clauses to cancel the licenses if the company is sold (since the company knew it was likely to sell itself to someone anyway).

  • Imma-what? (Score:5, Funny)

    by Yamata no Orochi (1626135) on Monday December 07, 2009 @03:00PM (#30356266)

    Immanent...I don't think that word means what you think it means.

  • by teh_commodore (1099079) on Monday December 07, 2009 @03:10PM (#30356386)
    As a Mac owner and iPod/iTunes user AND a [the only?] paying LaLa customer, I'd be absolutely thrilled if this led to tighter integration between the two products.

    Right now, I have iTunes that I use to update my iPod and LaLa which I primarily use to listen to music when I'm on ANY web connected computer. I use LaLa over iTunes at home because I have streams for some songs that I have a paid license to listen to on LaLa that I didn't pay the extra 79 cents to download, so they aren't available in my iTunes.

    With LaLa, if I have an internet connection, I can listen to my songs and streams from anywhere, which means I don't need copies of all of my MP3s (or whatever) on my laptop, my work machine, my home machine, etc. It's amazing, and stream licenses are only 10 cents per song.

    LaLa also provides a music mover app, which watches my iTunes directory and automatically unlocks the streams in LaLa of the tracks of whatever CD I just imported on iTunes.

    Suffice it to say, I love it, and if they integrated the two products, I'd love it even more.

    • Re: (Score:1, Insightful)

      by Anonymous Coward

      Its funny that you don't even know how much you're getting screwed. Yeah, Lala might be cheap, but it could disappear at any time (IMO very likely under Apple rule) and you will lose all of the music you previously had access to. Also, why would you want tighter integration of the two products? The only advantage is that you would use one application for two instances of music listening (can't you do this to start with anyway?). The disadvantages include price fixing, quality loss (Apple's music is terribad

      • You'll probably get modded down as flame, as you suggested, and you won't get a notification of my reply since you're anon, but I felt compelled to reply anyway.

        1) It's a bit presumptuous to assume that I buy everything that Apple makes because it is "hip." I bought my Mac mini because I wanted a Unix system that my wife felt comfortable using. I don't like having multiple boxes. I don't like running virtual machines. I run Linux everywhere I can, laptops, work, and so forth, but for my home machine,

    • by soliptic (665417)

      LaLa ... watches my iTunes directory and automatically unlocks the streams in LaLa of the tracks of whatever CD I just imported on iTunes.

      Interesting... isn't this almost exactly what mp3.com got sued for? "Knowing" you've bought a CD and giving you access to online audio of the same tracks?

  • That would make a pretty good name for a startup company.
  • iTunes upload/sync (Score:3, Interesting)

    by mapdock (552638) <mapdock@@@cox...net> on Monday December 07, 2009 @03:31PM (#30356630)

    Lala offers a feature that lets you upload your iTunes library and keep it synced; I always described it as "like having access to your iTunes library from anywhere online," so I can see Apple being interested from that angle.

  • by fluor2 (242824) on Monday December 07, 2009 @03:35PM (#30356660)

    1. Buy the patents
    2. Compete with Spotify

    • by the_arrow (171557)

      If they wanted to compete with Spotify, wouldn't the Spotify-for-iPhone application have been removed already?

  • by Anonymous Coward

    Tinky Winky, Dipsy and Po?

  • Hopefully this means we will have better samples before buying online. I am tired of searching for an album on Amazon, being curious, and finding the 30 second samples don't really help me, especially when the samples are TERRIBLE bitrate and overcompressed. More and more bands are offering the entire album for streaming online so that prospective purchasers like myself can get a real taste of the album before buying it.
    • Hopefully this means we will have better samples before buying online. I am tired of searching for an album on Amazon, being curious, and finding the 30 second samples don't really help me, especially when the samples are TERRIBLE bitrate and overcompressed.

      If you do a Google search for a song title and band right now, many return a "Liston On" link. Just now I did it and it gives three links for a copyrighted, RIAA song:

      • iLike - a broken video clip
      • Pandora - a 30 second sample
      • Lala - streaming play it once version of the whole song, not the best sound quality, but acceptable. It also has the whole album streamable once from the same page.
  • by akouris (1695156) on Monday December 07, 2009 @04:07PM (#30357094)
    I think that as arrogant as one might say that Apple is, they have realized that the world of internet/asp services is much different than something that you totally control, in a closed environment of an OS. They learned that the hard way through the numerous shortcomings of Me, a service which was very ambitious, but today still remains very unrealiable and has numerous shortcomings in all categories (mail, calendar, contacts, photos, idisk) when you compare it with other free alternatives. When Me was initially announced, for a brief moment Apple had the chance to turn the market upside down, and be a leader in the ASP/cloud services arena. Today they are not even considered a strong player - Me remains a supplementary service for only a small part of the iPhone base of users. Consider what could have happened with Me if Apple had purchased a number of successful services (Yousendit, Dropbox, Plaxo, etc.) and combined them under one umbrella - their offering would be unmatched, they would have a brilliant team of developers, and today they would probably be leaders in the market. I believe that this is the basic thinking behind Lala's acquisition: they are buying time, which is the next best thing after money: they are buying time they have lost, against Lala.com, Last.fm. They are buying time that they would loose if today they began to develop their own streaming service. They are buying time that it would take them to learn the mistakes others did. With the cash reserves that Apple has right now, if it follows a clever acquisition strategy it can pretty soon gain a significant presence in internet, one that in time would rival that of Yahoo, Microsoft and perhaps even Google. If the rumors surrounding the recent sale of AdMob are true, it seems that Apple is implementing such a plan.
  • 1) defensive buy, but i doubt it. 2) to sell music outside itunes, why not?
  • i think most people are looking at this in far too short sight. apple may have something up their sleeves that we have no idea of yet (just as they will have something come out (i think fairly soon) of their newton tech, which they kept when others offered to buy). we may not know for a few *years*. but they are pretty savvy on what they are doing.

  • Maybe Apple did indeed buy them to get engineering know-how. Apple certainly don't know how to build a reliable appliance for media serving. I have an Apple TV. It is the most troublesome product I have every had, in any category. It "just doesn't work". I have to restart the thing about once a day because it gets "stuck" if it temporarily loss a connection. It is so, so, so fragile. It is awful. It is so bad that I started keeping a log of all the times that it freezes. And it doesn't even have a power but
  • Apple never, and I repeat never, does anything without a reason. You can bet the farm that Lala has something Apple wants or needs. More interestingly, when industry watchers cannot quite put their finger on whatever that might be, it usually means that experts are thinking inside the box, and Apple is thinking outside said box.
    If Lala has software or technology Apple wants, it's probably because buying it now will save time over developing it in-house. That's been a pattern in the past.
    If Lala has contract

    • From the article Lala's streaming contracts aren't transferrable, but then Apple has the ability to negotiate them again.

      • by gordguide (307383)

        " ... From the article Lala's streaming contracts aren't transferrable, but then Apple has the ability to negotiate them again. ..."

        Or Apple could simply sign a contract with Lala, while at the same time directing Lala towards Apple's goal. Apple (as owner or major shareholder) will almost certainly have it's agents on Lala's Board of Directors, enabling such guidance or business direction. There is nothing that says Apple will fold Lala into Apple itself; they can (and have; ie Filemaker, PA Semiconductor,

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