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Apple Technology

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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  • One Word (Score:5, Insightful)

    by Alcoholic Synonymous (990318) on Monday December 07, 2009 @01:41PM (#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?
  • by megamerican (1073936) on Monday December 07, 2009 @01:43PM (#30356032)

    "Competition is sin." -John D. Rockefeller

  • Re:One Word (Score:5, Insightful)

    by Enderandrew (866215) <enderandrew@gm[ ].com ['ail' in gap]> on Monday December 07, 2009 @01:53PM (#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.

  • Re:Google (Score:3, Insightful)

    by IANAAC (692242) on Monday December 07, 2009 @01:59PM (#30356250)
    Is Google competition for iTunes?

    I've honestly not ever heard that before.

  • by jo_ham (604554) <.moc.liamg. .ta. .999mahoj.> on Monday December 07, 2009 @02:07PM (#30356338)

    iTunes runs on Windows. How would making it iTunes-only restrict it to the Mac platform?

    How did this get modded insightful?

  • by Thud457 (234763) on Monday December 07, 2009 @02:17PM (#30356452) Homepage Journal

    Is Google competition for iTunes?

    I've honestly not ever heard that before.

    Google is competition for everything, it's just a matter of how soon.

    It's a dessert topping and a floor polish.

  • by fluor2 (242824) on Monday December 07, 2009 @02:35PM (#30356660)

    1. Buy the patents
    2. Compete with Spotify

  • Re:Google (Score:3, Insightful)

    by Z00L00K (682162) on Monday December 07, 2009 @02:57PM (#30356966) Homepage

    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 of a new car.

  • by Anonymous Coward on Monday December 07, 2009 @06:15PM (#30359170)

    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 when it comes to quality), more DRM, and less freedom. Its the blood of people like you that Apple drinks to stay alive. Cast of your shackles and make Apple win your business instead of blindly buying everything they sell because its hip.

    Yeah I know this is a flame. Mod my anonymous ass down and see if I care. I'm sick of Apple, Micosoft, et. al. fanboys, and I wish we consumers would realize that every company is bending us over the hood of their Ford truck and having their profitable way with our back pocket. Since the government is too corrupt or stupid to see how much big business is fucking the people, its up to us. Buy things to own, not stream or rent. Don't allow yourself to be stuck in contracts (cell phones, tv) that are crafted to screw you out of as much money as possible. Give your hard-earned money to companies that honestly put the customer before increasing profits.

  • by UnknowingFool (672806) on Monday December 07, 2009 @08:36PM (#30360380)

    First of all $4 billion for the division not just for iTunes. Second, that's revenue not profit. In many businesses, if the wholesale cost is 70% of revenue, the product is not going to make much profit. 30% left for overhead means the profit may be 5-10% if the business runs lean. So yearly that would put iTunes at $100 million profit maybe. That sounds like a lot but it isn't considering the amount of effort to acquire the profit.

    So, from where I sit, Apple definitely *does* have interest/incentive to try to dominate music distribution - both to sell more of their 'own' products, and to increase the "Apple Tax" they collect on each track.

    Except Apple has done everything opposite to what you would expect if they were trying to gain more share. Converting their entire catalog to non-DRM'ed only helps their competitors. Apple sells music because their customers want it and no one else was going to help their customers.

    Here's where the acquisition of Lala to remove a competitor doesn't make sense financially. How many much more in sales would Apple get in eliminating Lala? A few million maybe. That translates to tens of thousands in profit. And how much did Apple pay for Lala? If they spent $10 million, it would take decades to pay back.

    If you look all the major acquisitions of Apple since Steve took control, every one was for a particular purpose or product, not to undercut competition as MS would do:

    • NeXT : became the basis of OS X
    • KeyGrip (from Macromedia): became Final Cut Pro
    • Emagic: developed into Logic Pro, Garage Band
    • SoundJAM (from Casady & Greene): became iTunes
    • P.A. Semi: chip design for next gen iPod/iPhones

Recent investments will yield a slight profit.

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