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Apple buys LaLa, looks to overhaul iTunes

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A recent acquisition by Apple could mean a completely new business model for the popular music service iTunes.

iTunes made the music ala carte option popular by allowing single song downloads for a dollar. While the model was overwhelmingly successful, perhaps in part because of the stores companion iPod, it had its flaws.

Perhaps the biggest problem, which has been rectified as of January, was iTunes DRM restrictions, which limited the use of downloaded media to only Apple’s products. Other issues include limiting iTunes accounts to specific computers and only streaming 30-second samples of songs.

Enter Lala, a music site that makes more than 8 million licensed songs available to users to stream for free. The site reads:

“Take your music and fuse it with a massive licensed catalog to easily play, buy and share on the web.”

Users can register and steam any song once for free. After listening to a song they can replay a 30-second sample of it.

If a user decides to buy a song, or album, they can purchase it outright, for as low as $3, and own the file, which they can play on any MP3 player.

Now here is where Lala is innovate, for 10-cents a user can buy the rights to add a song to their collection and stream it online, from any computer, all they want. Full albums can be added to user’s collections for as low as 45-cents, most are around $1.

Universal access to a collection of streaming music from any server in the world is very appealing. So appealing that Apple reportedly paid $85 million for La La Media Inc.

The acquisition could have a number of ramifications. At first glance it looks like a monopolistic move as the 100-pound gorilla, Apple with 70 percent of the digital download market share, buys up a promising fledgling start-up.

It has been reported that Apple was more interested in the minds behind Lala than the streaming service itself; however there is also speculation that Apple may dismantle the site eliminating current user’s access to their streaming collections.

However, the Wall Street Journal reported today that Apple intends to revamp iTunes with a focus on the web.

The WSJ report reads:

“Apple Inc., the company that restructured the music industry around its iTunes service, is exploring an overhaul of the way it sells and stores music that is aimed at extending its influence to the Web, according to people briefed on the strategy.”

Regardless of the outcome, Lala has clearly spurred change in the music industry that appears to benefit the customer.

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Written by David Young

December 10, 2009 at 6:58 pm

Posted in MP3s, Music

Tagged with , ,