The New York Times reports that Apple has acquired music streaming service Lala. However, I didn’t find the original “in talks to acquire” story very compelling, as my previous four employers were all engaged in dialogs with various suitors at various times before ultimately being purchased. (There can be only one.) But now that this has been confirmed as a done deal, it’s worth dissecting.
Regular readers may recall that I’ve been pining for a subscription-based iTunes music service. And, perhaps, Lala is the missing link to make it happen. Yet the Times suggests this deal may not be about Lala itself, but rather its brain trust and intellectual property.
Apple would primarily be buying Lala’s engineers, including its energetic co-founder Bill Nguyen, and their experience with cloud-based music services.
If accurate, I wouldn’t be at all surprised to see Apple shut down Lala in the near term — Google’s preferred M.O., as seen with EtherPad yesterday. Until similar functionality can be integrated into Apple’s iTunes ecosystem. Of course, the digital landscape has changed with services like Pandora, Sirius XM, and Real Rhapsody all streaming to the iPhone and web. But Apple, who controls both the horizontal and vertical for many along with possessing studio relations (and yank), will have no problems competing should they go down this path in some manner. Bring it on.
If Apple does shut down Lala, I wonder how they’ll support or compensate existing customers. Fat iTunes credits, maybe? Also, I wonder if this deal makes Spotify a larger target for a competitive acquisition.
“I wouldn’t be at all surprised to see Apple shut down Lala in the near term…Until similar functionality can be integrated into Apple’s iTunes ecosystem.”
You are assuming a lot – there is a 50% chance Apple will shut down LaLa and never ( ever! ) offer streaming service at all in order to keep everyone locked into iTunes.
Ref. http://en.wikipedia.org/wiki/Vendor_lock-in