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Apple Kills Lala Streaming Music Service, But What Does it Mean?

As you may have heard, Apple (s aapl) plans to shut down streaming music service at the end of May, a company it purchased only recently in December of last year. At the time, speculation ran rampant that Apple was planning on using the service to launch its own streaming music venture, probably for use with iTunes and the company’s varioius iDevices.

Lala features an 8 million song deep catalogue, which can be streamed by any user once for free. If you wanted to play the song more than that, you paid 10 cents and received unlimited replays. Download purchases were also available, starting at 79 cents per track.

No new users are being accepted to Lala as of last Friday, and the website will be shuttered entirely on May 31. That means anyone who paid for unlimited streaming options will also be cut off at that time. Apple has said it will be refunding paid subscribers with iTunes credit in order to compensate, but of course iTunes can’t match the 10 cent unlimited streaming deal.

So what’s Apple’s end goal in buying and then fairly promptly killing the service? Speculation abounds that it wants the intellectual property and staff in order to create its own rival to popular services like Pandora and, while still funnelling yet more consumers to its hardware line.

But is it actually time for Apple to bite the bullet and accept that cloud-based streaming is the future of media distribution? I think the answer is no. Cupertino knows it doesn’t have to be ahead of the curve regarding media distribution so long as it continues to lead the way in media playback devices. iPod is still the category-defining brand in that regard, and the iPad’s million unit milestone just recently proves that Apple isn’t yet done reshaping the market according to its own vision.

Apple is shuttering at the end of the month, that much is inevitable. What is far from inevitable is that this move will somehow lead to Apple launching its own streaming music service to fill the void. It’s much more likely that Cupertino made the purchase (which was barely a drop in the bucket, in terms of purchase price) to scope out the streaming music service from the inside, pull it apart and see how it ticks. From that vantage point, it would be that much easier to make an informed decision about how quickly Apple had to move into the space, and I’m willing to bet that what they found out is that there’s no hurry.

Shutting down Lala probably just ends a resource bleed and eliminates a potential iTunes competitor now that Apple’s gathered enough intel. So if you’re saving that iTunes credit they gave you for closing out your account for when Apple launches its own streaming service, don’t, unless you feel like waiting a long, long time.

10 Responses to “Apple Kills Lala Streaming Music Service, But What Does it Mean?”

  1. Is it in the recorded music industry’s interest to have Apple move from being the dominant al-la-carte music service to the dominant music subscription service as well? What would the cross-border competition/monopoly law issues be on a global level for such a situation? What will be the effects on new potential entrants to the market and investment in them?

  2. MarcZero

    I really think you are off base with your analysis. Think of the cost of each component in an iProduct. One of the bigger priced components is the memory. People want more apps, music, video, etc which means apple must push for larger size memory chips. What if you didn’t need to carry your music around with you on that device? Wouldn’t your memory go a lot farther? I think they will pursue the cloud for many reasons…this being one of them.

  3. Chris Cooper

    It’s unfortunate that Lala is shutting down. It was a really great service in my opinion. I hate iTunes, sometimes I want to listen to a song just once but not have to buy it and this service allowed for that

  4. Streaming music may have a future advantage for a hardware maker like apple by making the stream only throw their devices, maybe they just want to acquire the technology and experience, then they will have something with their own iThing names!

  5. Tsubame

    I never liked any of these streaming sites myself, because frankly I like owning my music. Paying 10 cents to ‘borrow’ something unlimitedly is bad because well, the service will never last forever and when it shuts down you are without all your music. So I can’t say I am very devastated that Lala is going down.

    Can Apple make a streaming alternative I like? If anybody can, it is probably them, but unless I actually own the music permanently I will never buy into it. I’d much rather pay 99 cents for a song and own it to do whatever I like with it rather than pay to rent a song. Movies or TV Shows, sure since I often only once them once. Music I always want to own though.

    • KsbjA

      You’re so right! Paying for streaming music is a big FAIL. It costs money to have the right to stream (service), it costs money to stream (cellular network carrier or ISP), it costs money to buy the music after the service shuts down (music store). On top of that, you also need to either keep a web page opened or use a special app to listen to your “cloud” music. Putting it on devices like Clickwheel iPods is also impossible, and if you’re on a long boring trip with poor network coverage, you can forget about listening to music.
      Apple has to radically change how cloud media works. I have a different idea It would be awesome, for example, if you could open up your iTunes library from anywhere! Like, if I have bought a bunch of songs (or maybe a movie!) and I want to enjoy my purchase with a friend at his/her home, I just log in to my iTunes account from the friend’s computer and have full access to all my purchased content. Sure, lots of it is on your iPod/iPhone/iPad nowadays, but with all the crazy people who have weeks of music in their iTunes library, it just won’t fit on your iPhone, so this is where streaming could be a great added value to your iTunes purchase. (Also, it’s all on Apple’s servers anyway – no uploads necessary.)

  6. coolrepublica

    Apple Kills Lala Streaming Music Service, But What Does it Mean? It means people at Apple at jackholes. Any more questions?