Earlier today we covered rumors that Apple was in talks to acquire streaming music service Lala. Now New York Times tech reporter Brad Stone has tweeted that it’s a done deal. He writes, “Apple has acquired digital music startup Lala. Now updating our story”. You can find the NYT story here.
This could be bad news for Lala users. It’s unlikely that the innovative deals negotiated by Lala will survive through the acquisition. For over a year, Lala users have been purchasing the rights to stream their music an unlimited number of times for ten cents per song. If the deals with the music labels go up in smoke, Lala may lose the right to stream those songs. In other words, all the money users have been spending on web songs may go down the drain. If the deals are nullified, hopefully Apple will renegotiate them to at least cover existing purchases until it releases its own streaming music service. We’ve reached out to Lala but have yet to hear back.
Likewise, this may well affect the Lala music gifts that have been recently offered by Facebook, and it could also harm the Music OneBox service Google recently launched (though Google can still rely on MySpace/iLike for its song streams).
Stone writes that Apple is interested in Lala because of its engineering talent and technology, and that it was Lala that initiated the discussions. From the Times:
One person with knowledge of the deal, but who was not authorized to discuss it, said that the negotiations originated when Lala executives concluded that their prospects for turning a profit in the short term were dim and initiated discussions with Eddy Cue, Apple’s vice president in charge of iTunes.
This person said Apple would primarily be buying Lala’s engineers, including its energetic co-founder Bill Nguyen, and their experience with cloud-based music services.
The deal makes sense. It seems inevitable that Apple will eventually launch its own cloud-based streaming music service. And that’s exactly what Lala is — an iTunes in the cloud, with some interesting pricing mechanics.
A few other interesting things to note. This acquisition comes a little more than a month after Lala was integrated into Google’s OneBox and Facebook’s gift store. Lala may well have been viewing these launches as last-chance efforts to find a path to profitability. Given these reports that Lala’s “prospects for turning a profit in the short term were dim”, it looks like those launches may not have gone as well as Lala hoped.
there goes the name lala. how bout’ appla?
Smart move for apple bad move for the internet…
The closed garden is doomed, its just a matter of time
We still have Spotify – which Apple was apparently in talks to acquire, guess that fell through and they just decided to snap up Lala?
nice move apple!
MONOPOLY ALERT: Can’t wait for the app.
http://www.techcrunch.com/2009/03/28/an-exclusive-first-look-at-lalas-iphone-app/
After that Tweet, I hope NYT was still the first to break the news!
Lala’s proximity, versus Spotify for example, probably didn’t hurt.
So, they are going to do the Music Streaming like in Zune Subscription service?
I know that its a completely different story when a major player like iTunes starts to move in the direction of streaming than Zune.
Well I love Lala & their team but I hate iTunes. Very torn by this
I’m curious if this might be a strategic effort by Apple to prevent Google from getting their hands on it. If Google had wanted to go into the music biz Lala could have been the best candidate
Sigh I hope to hell that they don’t just kill it Lala is a big part of my world
Agreed. Lala has been my music service of choice for over a year now. I will be very upset if Apple ruins it.
Hmm… Arrington did you do this with all that MOG love scarring poor Apple like that?
Lol.. I think this is very interesting.
So so happy I did not make that streaming service.
If apple offers $19.99 a month all you can eat, people will pig out.
I’ll pig out too!
Couldn’t you get both Rhapsody and Pandora One for less?
Rhapsody sucks. The idea and pricing is fine, but both the desktop program and the web interface for streaming music are both huge steaming piles of shit.
$19.99 a month? Are you kidding? Mog is $5 a month and it totally rocks. It’s not free like Pandora, but it’s waaay better than Rhapsody, and it has that killer radio thingy that makes Pandora look pretty hokey.
Apple’s going to have to offer for $5, or have the price folded into the price for the service from the phone company
Surely lala won’t screw it’s users as much as you suggest they may.
Also, lala’s iPhone app has been pending approval for several weeks now. I wonder if this could either speed up it’s approval or completely nullify the app.
I have a feeling this will nullify the app. If the agreements with the record labels are nullified because of the sale.
well if apple rejects its own app then we really know the app store approval process is screwed beyond belief.
If Apple has indeed acquired Lala, then I do not see any reason why Apple would approve the Lala iPhone app. In my opinion, Apple will merge Lala service with iTunes.
the good – maybe this means easier/better ways of accessing your iTunes library everywhere you go, via mobile phone, etc.
the bad – i’m sure it will be closed to Apple’s ecosystem.
i don’t like this news at all.
Off-topic question. Why did TechCrunch stop email notification of comments? I only see the RSS option now. Any special reason? There are times when I do have access to my RSS feeds
Because no one wants to fill their inbox with emails telling them someone they don’t care about said something they don’t care about, about a post they only marginally care about.
+1
I’m not happy about this. I love Lala and the iPhone app is possibly the best application available for the iPhone.
I love Apple and their products, but I see bad things on the horizon for Lala users and the end of a very innovative service.
My prediction for Lala’s future:
They’re going to use the IP, content deals, the backend talent, and then scuttle the company.
If they keep the on demand streaming option, this is how it will work:
You have everywhere access to your iTunes purchased songs for free and that’s it. Also any songs you purchase in the future the download price will come with free on demand streaming and that’s the only thing left of lala as we know it.
I really hope I’m wrong, but probably not.
Yea this is my fear as well.
The $0.10 streaming songs were such a big sell for me, honestly I er never paid for a single track on iTunes in my life but I’ve spent a bunch of cash on the $1 Lala albums.
If Apple takes them away and jacks it up to a dollar that’s the end of my paying for music, back to bittorrent
That is pitiful.
interesting….i logged on today and noticed that they have passed all their CD trading (where they got their start) over to http://www.swaptree.com. see here:
http://www.lala.com/tradingtransition.
coincidence?
noticed that yesterday, too. i’ve been trading on lala for about two years and can’t quite commit to the switch to swaptree.
acually….today i had some luck with Swaptree…2 days in…4 trades! might want to give it a shot.
I had about 10 credits with Lala trading, and now they are just gone. All that hassle of packaging and sending the CDs, as well as the missing CDs, for nothing.
At least they should have compensated those who had credit with them? What company does business like this? I want nothing to do with Lala or Apple now.
As usual the consumer gets screwed. I spent quite a lot of money on lala.
Yep-this is what happens when you put any money into a service where you don’t get total control of the content.
Doesn’t matter if its a startup like Lala or a big corporation like Microsoft (MSN Music, Plays for Sure!), you can still end up screwed with nothing to show for it in the end.
Glad to see Bill’s still going to be involved in it. I’ve been a member since the beginning in ‘06 when it was trading-only – he regularly posted and seemed very enthusiastic about the development and direction of it. Would hate to see it go on without him.
Yeah, I think Apple is going to have to try to keep beating Google to the punch. Google must have plenty of money to spread around to buy up businesses. Google is going to go after the cheapster masses and will probably win their support. They’re going to snatch up all the user base that used to belong to Windows Mobile.
What does Apple even need Lala for? Is Apple going into streaming side by side with iTunes?
I really wished they would have sold to Google.
Google would have let it evolve into a new music distribution model, Apple will squash it down so it maintains their current iTunes model. The advancement of online music just took a step backwards
This is a big loss for consumers and all people who purchased anything from Lala. Apple had surely bought them to cut another potential branch of competition – this is so not about Lala’s technology.
I totally agree. Also – the iPhone app was pending approval. Do you know how much iTunes sales this app would undercut specifically to iPhone (and a lot of iPod touch) consumers? It would hurt their sales to approve it, and hurt their approval process brand image if they declined it. Another app they wouldn’t let through the gates strangely next to Spotify.
Apple bought Lala so they could kill it – and take its talent. And never approve that app that would hurt them so badly.
Yeah that doesn’t make sense at all.
It was not cost effective for Lala to continue operating as its model was limited, despite it’s “rabid” use apparently. The difference between it and the iTunes? Full song preview (once) and cheaper downloads. Fucking amazing business model!
It’s distribution ability though is interesting. A model that can introduce and get you to buy music on sites like Pitchfork for example which is always featuring loads of new music. Apple carries the same music most of the time, but wouldn’t it be beneficial to the Apples bottom line if those people were buying from iTunes instead.
And if you don’t like buying from Apple, buy form Amazon, Emusic, AmieStreet whatever floats the boat.
I honestly haven’t bought any albums from iTunes for awhile, as Amazon’s slight price advantage and open format has been a seductive temptress. So I’m not even advocating from the perspective of a rabid user.
I’m just saying let it all happen and be level-headed. Apple will make nice with you. I guarantee it since this is a much more visible entity than most of their acquisitions.
If this is true, fuck Apple. I will never buy another Apple product if they ruin a great app for all users beyond the cult of Mac.
Mobile Me would be incorporating this service calling it Music on the Cloud as Apple would say your songs on your drive could be deleted
http://thetechnologycafe.com/itunes-to-stream-music-apple-acquires-lala/
Damn. Loved Lala but hate iTunes. Maybe a browser-based model similar to lala will help.
NOOOOOOOOOOOOOO….
Lala going into the closed apple ecosystem is a loss for everybody that relies on streaming music through the lala service.
We all hate microsoft but dear god I prefer microsoft over apple;s close mentality towards things.
Really, you “hate” Microsoft? Do you hate WalMart, GE, Pepsi, Coca Cola, GM, Ford, IBM, HP, Intel, Levi-Strauss, McDonald’s, Starbucks, Disney, etc?
Guess it’s time to stop using your pirated XP partition then.
Was LaLa even a popular service before the announcement happened? It seemed like an interesting idea but there are much better legal alternatives out there to get free streaming music.
I have been using Lala.com almost daily for about a year. I love that I have my entire music collection available to me while at work. And I have spent about $100.00 on music that I would have never bought at full price. The .10 per song to stream is a great price point that got me to bite many times. I am guessing that $100.00 will soon be down the drain since I fully expect Apple to kill Lala.com at some point in the near future.
I just barely started using it. I really sense the deal with Facebook and Google would have got more users, but it’s true, Lala was a hidden gem.
And I have hopes that Apple won’t destroy it, but it sure seems like it was only for the people not the company/idea of Lala
Damn. This really sucks. I bet the trading side will get shut down for good.
Trade? Holy shit i was not aware of it.
They still owe me for 5+ trades that I didn’t get back yet. I want cold hard cash as compensation for my missing discs. If not, I hope there is a class action lawsuit filed, which could complicate any acquisition.
really jerry? class action lawsuit over 5 trades. I am sure they will honor whatevera accounts are outstanding. apple has a pretty good track record of making products people like.
relax.
I just came in here from lala.com, where I’m still owed nine CDs. That means I’ve basically given away nine CDs from my collection with no recompense. If you’ve bought any CDs lately, you know that they range anywhere from $13 each (Wal-Mart) to $19 each (Best Buy) Using an average of $15 each, for nine CDs, that’s $135 that I just lost.
As to honoring accounts, what will Apple do? Are they going to give me nine CDs, or the cash? No. They’ll offer me credits on lala for streaming or downloading songs either on lala or on iTunes, which isn’t what I joined the site for. So personally, I’m all for the idea of a class action lawsuit.
C’mon, surely you ripped your CDs before you traded them. What have you lost?
Some plastic?
@bloobeard “C’mon, surely you ripped your CDs before you traded them. What have you lost?
Some plastic?”
In fact, I didn’t rip them. Almost all of the ones I traded were doubles of CDs that I already had or ones I picked up expressly for trading. Why does it seem to be so difficult for people to believe that some of us used the site exactly for what it was meant for, without accusations of piracy?
I complained because I too had several “credits” for trades. They tell me I actually “owe” one (which is B.S.) meanwhile I can’t see my trading history anymore (convenient). Because I’m a “loyal customer” they gave me a $5 store credit. *rolls eyes* how about my $100 back for the CDs I mailed out (and didn’t rip because I only ever traded CDs I bought and didn’t like).
TC is following an awesome strategy to generate multiple posts on the same story. First report rumors in one post and then write another post to mention that the deal is done.
Yes, iTunes isnt good – LaLa go!
so, i hate apple and their walled garden with a burning pashion- what’s a good alternative to lala? is the closest thing imeem?
Good idea apple..
There you go Apple! Lalalala..
Man that’s a lot of whining! “closed ecosystem,” “walled garden,” “apple;s close mentality” (what?),” “closed garden,” etc. It’s always simple: choose something else and accept the associated risks. Anything you buy from any company is only supported as long as they’re in business. All these money-losing business models for music will eventually shut down or merge. Why is this a surprise? You bet on a cheap alternative that bleeds cash and it will eventually go out of business.
Apple actually runs iTunes as a money-making, successful business with a sustainable business plan. Perfect? No. Predictable? Yes. Profitable? Yes. Portable? (take your purchases everywhere on virtually anything) Yes.
Once you buy it, it’s yours for life unless you are careless or ignorant.
Well said, I’m amazed anyone other than labels invests in these music start-ups. No matter how great the interface at the end of the day they are bleeding cash to labels and two steps away from being priced out of business entirely.
filecat13 & Lenny- Do you guys work for Apple?
Lala, Spotify, Pandora etc are CONTROLLED by the labels. The companies have no chance at succeeding because they are at the mercy of the stupid record companies.
At least Apple, love them or hate them, is the only company to date that has built an ecosystem (closed or no), that actually forces the labels to negotiate. Ultimately, that means lower prices for YOU in the long run. The only reason the labels were playing nicer with lala etc now was to undercut Apple’s negotiating power, not out of some kindness of their hearts.
iTunes is more expensive than Amazon, so I highly disagree with you that iTunes is “cheaper”. In fact, the AAC or MP3 format is inferior to a wave CD. Oftentimes, an iTunes download is more expensive than a CD on sale at Target. I do like iTunes in storing my music, but I have not bought from them because their prices are not competitive. Sadly, one place that had better download prices was Lala.com.
I hope Apple leaves the model largely intact, but if it wasn’t profitable, well, I am not sure what they will do.