Originally Posted by Gazoobee
This could be true, but the deals Lala has in place are kind of useless in that they are for the USA only.
For the purchase to be useful to Apple, they would have to go international with it almost immediately given their global focus now, and those international contracts would presumably be just as hard to negotiate as they would without Lala. I would also think that given their relationship to the music business in the USA, that they could negotiate streaming contracts for the USA (a la Lala), fairly easily.
Maybe they are just buying the installed customer base, or the "legal CD sharing" part of the contracts?
Random viewpoint from a semi-prominent indie in the biz...
Doubtful. Apple already has streaming built into iTunes for the radio stations, podcasts and those 30-second iTunes previews. More likely Apple is buying the talent and the cherry on the sunday is one less, however irrelevant competitor out of business. Based on royalty reporting that I've seen... there are maybe 200 active users on Lala, the most active maybe listening to more than 10 songs a day. They probably inflate their numbers to sound big to the public, but they just aren't streaming much to anyone. But then again neither are any of the other services. Very hard to get advertisers to pay for what consumers are eating, when they aren't eating at the restaurant, they're too busy stealing the food off the truck in the back.
Advertising is increasingly not fulfilling the role it used to, in sponsoring the creation and development of content. Consumers have been corrupted by illegal file sharing and are unwilling to pay for what they consume. The result has been a huge decline in content development. Streaming doesn't work as a mechanism because there's no way to pay any bills with it. If you think otherwise, please let me know, there are a lot of people who would love to start using it to support their art. Most of the noise is from VC sponsored tech startups that make a bunch of noise about their groundbreaking media service, they get a little press and sell to a bigger company, where the product never goes anywhere.
Once this insanity levels out and after some internal industry power shifts, all media will continue to move to an a la carte system. If you want to watch Battlestar Gallactica, you'll buy the episode or the season. If you want Lady Gaga's music, you'll buy a song or buy a series of songs that are released over time. Advertisers will fund the development costs, consumers will pay the labor and to the successful - profit. There's a lot of online bullsh@t from whiners complaining that they couldn't move Coldplay to their friends iPod. The industry result, especially for indie artists since Apple's removal of copy-protection is substantially lower revenue for artists and a new explosion in file trading sites (or as it's classically known - theft).
Apple has little incentive to push a streaming service for music unless they just mirror what XM does with a few preset 'radio stations'. If they could hammer out an agreement with all the major TV networks, maybe they could start a TV subscription service? However I'm going to assume that Apple also knows that train has already left the station too.
If streaming is to be had, the only area they would probably want to go is in movie rentals.