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Apple Buys Lala Music Streaming, But Why?

ScuttleMonkey posted about 5 years ago | from the piles-of-cash-and-nothing-else-to-buy dept.

Apple 131

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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Google (4, Informative)

bill_mcgonigle (4333) | about 5 years ago | (#30355978)

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?

Confessions of a monopolist (2, Insightful)

megamerican (1073936) | about 5 years ago | (#30356032)

"Competition is sin." -John D. Rockefeller

Re:Google (1)

Killer Orca (1373645) | about 5 years ago | (#30356206)

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:Google (2, Insightful)

Z00L00K (682162) | about 5 years ago | (#30356966)

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.

Re:Google (1)

cayenne8 (626475) | about 5 years ago | (#30357992)

"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 something easy to do accidentally really, I mean you KNOW when you're leaving the country) that's another deal, but, I wouldn't think it all that common as that I'd guess the vast majority of people here don't travel internationally.

Re:Google (2, Insightful)

IANAAC (692242) | about 5 years ago | (#30356250)

Is Google competition for iTunes?

I've honestly not ever heard that before.

Re:Google (5, Informative)

hansamurai (907719) | about 5 years ago | (#30356438)

“parent directory” mp3 OR wma OR ogg OR wav Band/Singer -html -htm -download -links

obviously, you haven't been paying attention... (3, Insightful)

Thud457 (234763) | about 5 years ago | (#30356452)

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.

Re:obviously, you haven't been paying attention... (3, Funny)

silent_artichoke (973182) | about 5 years ago | (#30356586)

<homer> mmm.. chocolate floor polish *drool* </homer>

Re:obviously, you haven't been paying attention... (1)

dogmatixpsych (786818) | about 5 years ago | (#30357664)

My browser doesn't render the tag correctly. Is this a new-fangled html5 tag that my IE6 program doesn't understand?

[I'd shudder if I really had to use IE6].

Re:obviously, you haven't been paying attention... (0)

Anonymous Coward | about 5 years ago | (#30357954)

I thought tumbleweeds were a dessert topping?

ba dump chaaaaaaaa...

Re:Google (0)

Anonymous Coward | about 5 years ago | (#30356358)

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?

IANAL, but shouldn't this transaction be looked into by antitrust officials for this very reason?

Re:Google (1)

HermMunster (972336) | about 5 years ago | (#30356892)

No. This is just a search result. No one has stated as fact that Lala.com is owned, in part, by Google.

Most people don't know but it isn't illegal to be a monopoly. Though most would agree that a monopoly is bad for the market and thus for consumers. You must be declared a monopoly by the courts for it to matter. And, then you must violate some of those special conditions that are placed upon a monopoly that's beyond the restrictions placed on a non-monopoly. Hence, no company wants to be declared a monopoly by the courts--they just want to act as one for as long as possible. Microsoft was declared a monopoly and were judged to have been violating antitrust due to them acting as a monopoly prior to being declared. Once declared it's a different ballgame.

Re:Google (1)

Mister Whirly (964219) | about 5 years ago | (#30358176)

Being a monopoly isn't illegal. Using your status as a monopoly to keep other companies from competing with you is illegal. It has nothing to do whether or not a court "declares" you a monopoly. Microsoft was found in violation because including IE with the operating system, and not as a separate un-installable component, was unfair to other browsers trying to compete with IE. Technically, Microsoft is not really a "monopoly", but they have such a large market share that most people consider them one.

Because it's a faggot name (-1, Troll)

Anonymous Coward | about 5 years ago | (#30356404)

Therefore Apple went right for it.

Re:Google (1)

netruner (588721) | about 5 years ago | (#30356482)

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 (3, Informative)

99BottlesOfBeerInMyF (813746) | about 5 years ago | (#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.

Re:Google (1)

HermMunster (972336) | about 5 years ago | (#30357020)

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.

Re:Google (1)

Anonymusing (1450747) | about 5 years ago | (#30357504)

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.

Re:Google (1)

rm999 (775449) | about 5 years ago | (#30356568)

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.

Re:Google (1)

artemis67 (93453) | about 5 years ago | (#30358288)

But Google controls their own results engine.

"Immanent"? (4, Funny)

abigor (540274) | about 5 years ago | (#30355988)

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

Review just in. (-1, Offtopic)

paiute (550198) | about 5 years ago | (#30356000)

No 4G. Less space than limewire. Lame.

Graduate school, vengeful ghosts, high explosives. If Fark were about chemistry, it would look like this:
Cadaverine [amazon.com] (new window)

Re:Review just in. (0, Offtopic)

paiute (550198) | about 5 years ago | (#30356022)

WTF? Bad Fark - get out!

Re:Review just in. (0)

Anonymous Coward | about 5 years ago | (#30358026)

maybe if you weren't whoring that book (yours?) out so hard, you wouldn't slip up and forget what site you're spamming...

One Word (4, Insightful)

Alcoholic Synonymous (990318) | about 5 years ago | (#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:One Word (2, Funny)

furball (2853) | about 5 years ago | (#30356036)

Do insane people avoid Google?

Re:One Word (2, Funny)

Anonymous Coward | about 5 years ago | (#30356356)

Do insane people avoid Google?

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

Re:One Word (0)

Anonymous Coward | about 5 years ago | (#30356078)

This is the first time I ever hear about Lala.

Re:One Word (5, Insightful)

Enderandrew (866215) | about 5 years ago | (#30356168)

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:One Word (1)

TooMuchToDo (882796) | about 5 years ago | (#30356430)

True. If anything, Amazon should've jumped in to grab them to push people to their MP3 downloads.

Re:One Word (1)

GeckoAddict (1154537) | about 5 years ago | (#30356546)

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.

Re:One Word (1)

TooMuchToDo (882796) | about 5 years ago | (#30356638)

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.

Re:One Word (1)

uniquename72 (1169497) | about 5 years ago | (#30356796)

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 may offer similar advantages.

Re:One Word (1)

99BottlesOfBeerInMyF (813746) | about 5 years ago | (#30356842)

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.

Re:One Word (0, Offtopic)

Ambiguous Coward (205751) | about 5 years ago | (#30356184)

Google Search for any song online via Google

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

Re:One Word (0)

Anonymous Coward | about 5 years ago | (#30357454)

You could Google for it on Bing.

Re:One Word (0)

Anonymous Coward | about 5 years ago | (#30357692)

Google: noun. "Corporation bent on data mining everything while professing to do no evil."
Googling: verb. "To search for something on the Internet, most often through Google (noun)."

Yes, it has become so prevalent as to be the Kleenex or Band-Aid of the Interwebs.

Re:One Word (3, Interesting)

99BottlesOfBeerInMyF (813746) | about 5 years ago | (#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.

Re:One Word (1)

guruevi (827432) | about 5 years ago | (#30357606)

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 of providing TV channels over IP (similar to how they were the first to have a decent, unified, affordable way of buying music online).

Apple already has the AppleTV but without all my favorite TV shows either streaming or affordable (not $30-60/season), I'm not going out to buy it because right now all it is is a glorified iTunes interface. And I've looked and looked and there is no way I can cancel out my cable tv subscription these days and have an affordable (less than 150% or $100/month) to get a selection of channels (I don't want all of them, only the interesting ones) on all my electronic devices similar to how I can get my music on all my devices.

Re:One Word (1, Interesting)

Anonymous Coward | about 5 years ago | (#30357656)

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 links to purchase the full song."

Re:One Word (0)

Anonymous Coward | about 5 years ago | (#30356394)

Wait, what was the one word?

Re:One Word (1)

iammani (1392285) | about 5 years ago | (#30356426)

Amen?

Re:One Word (2, Funny)

uniquename72 (1169497) | about 5 years ago | (#30356700)

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

This is precisely why Apple should purchase Pirate Bay.

iPhone streaming? (1)

anarking (34854) | about 5 years ago | (#30356024)

Perhaps for specific iPhone/iTunes streaming video?

Re:iPhone streaming? (1)

Esc7 (996317) | about 5 years ago | (#30356570)

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:iPhone streaming? (0)

Anonymous Coward | about 5 years ago | (#30357672)

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.

But what about my trip from my door to the tv? I hope they have a solution for that part of the trip too.

Re:iPhone streaming? (1, Informative)

ColdWetDog (752185) | about 5 years ago | (#30357872)

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.

Re:iPhone streaming? (4, Funny)

lwsimon (724555) | about 5 years ago | (#30356610)

Your post makes AT&T's network cry.

Re:iPhone streaming? (1)

SydShamino (547793) | about 5 years ago | (#30356658)

By mid next year that should be both AT&T and Verizon's networks crying...

Seems to be a lot of guesses from outside the deal (0)

Anonymous Coward | about 5 years ago | (#30356110)

Lots of assumptions without much meat from sources that didn't really have much insight into the deal. The engineering talent angle might have been a serendipitously correct guess, but I don't see Apple in much of a position to have to make bad deals for itself. They could have bought tech or licensing that might be useful to their future plans that they seem really good at hiding.

P.S. I think where the article uses "immanent" the author was too busy spinning conjecture to see that he meant "imminent."

Article summary appears to have it backwards (5, Interesting)

znu (31198) | about 5 years ago | (#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.

Re:Article summary appears to have it backwards (0)

Anonymous Coward | about 5 years ago | (#30356462)

Apple buys a lot of their technology and talent.

Mac OS X? Well, that's just NeXTSTEP, which they bought.

The modern UNIXy parts of Mac OS X? Those are just derived from FreeBSD.

Their C/C++/Objective-C/Objective-C++ compiler? That's GCC, with work being done on LLVM.

iTunes was SoundJam MP.

WebKit (and thus the bulk of Safari) was just KHTML, borrowed from the KDE project.

Buying their way to success is nothing new.

Re:Article summary appears to have it backwards (0)

Anonymous Coward | about 5 years ago | (#30356600)

I think it is just talent-based and has little to do with iTunes as we know it now. Apple has the tablet coming out and they want us to buy it and pay for subscriptions to the various media outlets that will support it. Streaming music, maybe. Streaming video, eNews, video, eMagazines, etc I think is more what Apple is looking for. They may do this through iTunes and change the shape of what iTunes is today or they may launch some other application/service that is based more on the subscription/streaming model.

Re:Article summary appears to have it backwards (1)

SydShamino (547793) | about 5 years ago | (#30356684)

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).

Logic Pro anyone? One less Windows product (-1)

Anonymous Coward | about 5 years ago | (#30356178)

I'm wondering if Apple is doing this for two reasons:

Remove a (fairly) platform independent music streaming website which is competition to them. Every stream is a potential lost download and 99 or more cents.
Make it only working with Apple's stuff by integrating it in iTunes.

It makes sense. Knock off a rival, make a value-added feature for only Macs which might bring more people in the fold, similar to how Logic was bought out, and the Windows version was chucked.

Oh well, at least this wasn't Spotify or last.fm.

Re:Logic Pro anyone? One less Windows product (3, Insightful)

jo_ham (604554) | about 5 years ago | (#30356338)

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

How did this get modded insightful?

Re:Logic Pro anyone? One less Windows product (1)

Urban Garlic (447282) | about 5 years ago | (#30356402)

Well, for cool people, it would restrict it to the Mac platform....

Re:Logic Pro anyone? One less Windows product (1)

jo_ham (604554) | about 5 years ago | (#30356624)

Really cool people aren't defined by their software choices.

Re:Logic Pro anyone? One less Windows product (2, Funny)

SydShamino (547793) | about 5 years ago | (#30356714)

Of course not. They're defined by their hardware choices. . . at least if they're seen with a Zune.

I kid.

Re:Logic Pro anyone? One less Windows product (4, Funny)

jo_ham (604554) | about 5 years ago | (#30356824)

I saw a Zune in a store once. When I got home, 5 people had unfriended me on FaceTube.

Re:Logic Pro anyone? One less Windows product (1)

cwrinn (1282510) | about 5 years ago | (#30356612)

iTunes runs on Windows, but it would be very Apple to put features in the Mac iTunes and exclude them from the Windows one.

Re:Logic Pro anyone? One less Windows product (1)

99BottlesOfBeerInMyF (813746) | about 5 years ago | (#30356790)

iTunes runs on Windows, but it would be very Apple to put features in the Mac iTunes and exclude them from the Windows one.

It would? Do you have any examples of Apple doing this sort of thing in the past? iTunes is to sell iPods and iPhones. Most of those people use Windows. Has the Windows version of iTunes aver lacked feature parity with the Windows version?

Re:Logic Pro anyone? One less Windows product (4, Funny)

VRisaMetaphor (87720) | about 5 years ago | (#30357112)

Has the Windows version of iTunes aver lacked feature parity with the Windows version?

I would have to say no.

Re:Logic Pro anyone? One less Windows product (1, Informative)

Anonymous Coward | about 5 years ago | (#30357502)

Has the Windows version of iTunes aver lacked feature parity with the Windows version?

I'll assume the second "Windows version" is a Mac version - yes, the Mac version has Applescript support.

Re:Logic Pro anyone? One less Windows product (1)

jo_ham (604554) | about 5 years ago | (#30356894)

Now that's just pure, baseless speculation.

As far as I can tell the Mac and PC version of iTunes are the same, have the same feature set and have no Mac-exclusive features in the past or currently.

In terms of the iPod and iTunes and the iTunes Store, they have in fact done the exact opposite of what you claim they would do just because they're Apple, since the iPod, iTunes and the iTunes store used to be Mac -only.

Re:Logic Pro anyone? One less Windows product (1)

UnknowingFool (672806) | about 5 years ago | (#30357522)

There are Mac only features of iTunes; however, they are exclusive to Macs because there is no real Windows equivalent. When syncing an iPod/iPhone in Mac, it will also sync calendar and contacts. Since calendar and contacts isn't part of standard Windows (Outlook or Lotus notes doesn't come with base Windows), it doesn't sync these.

Re:Logic Pro anyone? One less Windows product (1)

jimicus (737525) | about 5 years ago | (#30357564)

Now that's just pure, baseless speculation.

As far as I can tell the Mac and PC version of iTunes are the same, have the same feature set and have no Mac-exclusive features in the past or currently.

In terms of the iPod and iTunes and the iTunes Store, they have in fact done the exact opposite of what you claim they would do just because they're Apple, since the iPod, iTunes and the iTunes store used to be Mac -only.

More to the point, maintaining code for a GUI application on two totally different platforms like Windows and Mac is enough work as it is. About the only sane way to do it is to abstract the system-specific code to the bare minimum number of modules which hopefully hardly ever need to be touched - in which case you'd actually have to go out of your way to put features in one version that are absent from the other.

Re:Logic Pro anyone? One less Windows product (1)

UnknowingFool (672806) | about 5 years ago | (#30356798)

Remove a (fairly) platform independent music streaming website which is competition to them. Every stream is a potential lost download and 99 or more cents.

Well that motive makes sense if Apple wanted to dominate music distribution. The main reason Apple got into online distribution was to increase the sales of their products. They have been able to dominate only because they offer a richer ecosystem than competitors.

According to Apple's 10-K, Apple had revenue of $36.5 billion for fiscal year 2009 (ended September 26, 2009) of which $4.0 billion was in the division regarding iTunes store, iPod services, and iPod accessories. There was no breakdown into iTunes store itself but music represents definitely less than 11% of revenue for Apple. In terms of cost, music represents the lowest margin product for Apple. Of the 99 cents they charge for each DRM'ed music file, Apple has to pay the labels 70 cents. Apple only keeps 29 cents which goes to maintain iTunes store, payment systems, etc. For non-DRM'ed music, I'm sure Apple doesn't get any more percentage wise. So after all costs, it would appear Apple makes very little profit from music.

It makes sense. Knock off a rival, make a value-added feature for only Macs which might bring more people in the fold, similar to how Logic was bought out, and the Windows version was chucked.

The windows version of Logic was dropped because it didn't make a lot of sense to keep developing it. Apple wanted to incorporate Logic into their suite of profesional products. The windows version would not have had the same features as the Mac version because Apple didn't have a suite. So either Apple develops two separate versions of Logic with different features or Apple would have to develop a new pro suite for Windows. Or they could drop the windows version.

Re:Logic Pro anyone? One less Windows product (1)

JSBiff (87824) | about 5 years ago | (#30357666)

"of which $4.0 billion was in the division regarding iTunes store, iPod services, and iPod accessories. . .Of the 99 cents they charge for each DRM'ed music file, Apple has to pay the labels 70 cents. Apple only keeps 29 cents which goes to maintain iTunes store, payment systems, etc. . .So after all costs, it would appear Apple makes very little profit from music."

Maybe if you only talk about profit in terms of percentages. . .

Granted, I don't know what the breakdown of that revenue comes from 'services and accessories' - possibly a significant portion. Still. . .

To make the math simple, let's just call .99 == 1.0 (yes, that introduces 1 percent error; I think that's close enough for a /. discussion - this isn't an audit).

4 Billion * .29 ~= 1.1 Billion

I don't know what it costs them to run the iTMS, but I have a hard time believing it would come close to a Billion dollars per year (maybe a hundred million?). I'm not sure about you, but where I come from, a Billion dollars of profit is pretty significant. Of course, that simple calculation is based upon the assumption that all 4 Billion comes from the music side, and you're probably correct that a good chunk of that comes from Accessories, which according to your argument (which I do find mostly reasonable) will generally have a higher profit margin.

Still, my point is, even though Apple doesn't make much money *per track*, they sell a LOT of tracks. It does kind of add up after awhile. Plus, your premise that Apple is 'in the business' to sell hardware, services, and accessories is quite probably correct, the two goals aren't mutually exclusive. According to your own analysis, it stands to reason that the more Apple dominates distribution, the more hardware, services, and accessories they sell. 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.

How this plays out with the Lala.com acquisition will be interesting to see. I could definitely see a possibility for Apple to try to maybe launch a streaming service for iPhones (and iPods with WiFi like the Touch). Apple Radio, anyone? Maybe they see an Apple Radio service as a way to let customers discover more music, which they then hope to sell as tracks on iTMS. Maybe just to give users one more reason to buy an iPhone/iPod instead of another device.

Imma-what? (5, Funny)

Yamata no Orochi (1626135) | about 5 years ago | (#30356266)

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

Re:Imma-what? (0)

Anonymous Coward | about 5 years ago | (#30356548)

Imma-nent you finish.

Hopeful for some personal gain (5, Interesting)

teh_commodore (1099079) | about 5 years ago | (#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.

Any key technologies (1)

LunarEffect (1309467) | about 5 years ago | (#30356520)

That would make a pretty good name for a startup company.

fp TACO? (-1, Troll)

Anonymous Coward | about 5 years ago | (#30356590)

it's all about buttressing itunes (0)

Anonymous Coward | about 5 years ago | (#30356602)

I think however you look at it, you have to see Apple trying to reinforce their dominant position as the largest music distribution outlet in the world. Engineering talent my ass. It's about stronger control over the marketing and distribution of music.

PS: Do I get any extra points for saying both 'ass' and 'buttress' ?

Re:it's all about buttressing itunes (0)

Anonymous Coward | about 5 years ago | (#30356706)

Yes you get extra negative points!

Re:it's all about buttressing itunes (1)

gujo-odori (473191) | about 5 years ago | (#30357626)

I think it's code. If we select certain words, we get::

"Buttressing their dominant position in my ass."

I've heard of people being Apple fans before, but isn't that taking it to kind of an extreme?

iTunes upload/sync (3, Interesting)

mapdock (552638) | about 5 years ago | (#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.

Buy the patents, compete with Spotify (2, Insightful)

fluor2 (242824) | about 5 years ago | (#30356660)

1. Buy the patents
2. Compete with Spotify

But what about (2, Funny)

Anonymous Coward | about 5 years ago | (#30356744)

Tinky Winky, Dipsy and Po?

Better samples? (1)

Sirusjr (1006183) | about 5 years ago | (#30356792)

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.

Re:Better samples? (1)

99BottlesOfBeerInMyF (813746) | about 5 years ago | (#30357076)

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.

I wonder... (1)

WarpCode (1519261) | about 5 years ago | (#30356958)

How long will it be before the only way to access Lala will be to buy one of Apples overpriced mp3 players.

What happened to Apple... (0, Troll)

Anonymous Coward | about 5 years ago | (#30357068)

...supposedly agreeing to not enter the music business? I hope Apple Records sues their ass off for violating this agreement.

Re:What happened to Apple... (0)

Anonymous Coward | about 5 years ago | (#30357876)

You might want to check this out [wikipedia.org] . The trademark dispute was settled in 2007 when Apple paid Apple records an estimated $500 million. So no ass-suing to look forward to I'm afraid.

Re:What happened to Apple... (1)

AnotherShep (599837) | about 5 years ago | (#30357908)

The one they settled, or another one?

Re:What happened to Apple... (1, Informative)

Anonymous Coward | about 5 years ago | (#30358110)

They did. It was settled years ago.

"the High Court of Justice handed down a judgement on 8 May 2006 in favour of Apple Computer. The companies announced a final settlement of the dispute on 5 February 2007." http://en.wikipedia.org/wiki/Apple_Corps_v_Apple_Computer

Me's failure explains LaLa's acquisition (3, Interesting)

akouris (1695156) | about 5 years ago | (#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.

Think outside iTunes (1)

dUN82 (1657647) | about 5 years ago | (#30357226)

1) defensive buy, but i doubt it. 2) to sell music outside itunes, why not?

don/t judge apple too soon... (1)

- r (136283) | about 5 years ago | (#30357544)

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.

Apple TV: It just doesn't work (1)

cjonslashdot (904508) | about 5 years ago | (#30357644)

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 button so you have to yank the chord out and plug it back in! In contrast, I also have a Roku, and it never, ever has to be restarted and never gets "stuck". It just works. I shudder to think what Apple's new media slate will be like....

Streaming Music is a Logical Extension of iTunes (0)

PerfectionLost (1004287) | about 5 years ago | (#30357720)

You buy your music from iTunes. It's locked to that computer. Then you go to your friend's house and want to listen to your music. This is the point where a streaming DRM service would be idea.

Alternately, the iPhone already has a number of streaming services, why not stream directly to your device from the cloud. Services like last.fm and pandora have streaming apps for the iPhone. This would put Apple in that market too.

Re:Streaming Music is a Logical Extension of iTune (2, Informative)

Duradin (1261418) | about 5 years ago | (#30358062)

Wait, Apple put DRM back on music? When did that happen?

Re:Streaming Music is a Logical Extension of iTune (0, Flamebait)

PerfectionLost (1004287) | about 5 years ago | (#30358106)

I was unaware they ever switched away from the AAC (Apple Audio Crap) format, which is a built-in DRM.

Re:Streaming Music is a Logical Extension of iTune (1)

WilliamBaughman (1312511) | about 5 years ago | (#30358338)

AAC doesn't have built-in DRM. The encryption Apple used for AAC files sold via the iTunes store was a proprietary extension to the ISO/IEC AAC standard, if I understand correctly. VLC plays my AAC files, and the iTunes music store has been selling DRM-free AAC files for the better part of a year.

Re:Streaming Music is a Logical Extension of iTune (2, Informative)

Duradin (1261418) | about 5 years ago | (#30358382)

Advanced Audio Coding. It's part of MPEG4. Apple *HAD* used DRM, but it wasn't part of the AAC spec itself. Now (in the US) the music is DRM free and has been for some time.

WOXY (0)

Anonymous Coward | about 5 years ago | (#30358400)

LaLa owns WOXY.com. Maybe Apple just wanted to own the best radio station on the planet?

It is obvious innit (0)

Anonymous Coward | about 5 years ago | (#30358536)

tinky-winky, po, and dipsy dot coms were not available at the right price.

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