Late friday the New York Times reported that Apple had acquired online streaming music service Lala. Lala is a service that allows listeners to either buy and download songs for 79 and 89 cents, or stream the songs an unlimited number of times for 10 cents.
Apple obviously was not interested in the music download portion of Lala’s business, since they already have iTunes, the leader in that marketplace. What this acquisition gives them is a streaming platform, for listeners who prefer streaming music on demand rather than downloading and transferring music to personal devices.
Streaming music has become increasing popular with the growth of connected mobile devices. The growing popularity of streaming music from mobile devices has spurred interest in on-demand streaming from a music cloud that can be accessed anywhere from any device and is easier than downloading music and syncing with multiple devices. Some believe that cloud based streaming will eventually replace music downloading.
Apple appears to be at least hedging its bets with Lala – on the one hand, promoting cloud based streaming to replace downloads would hurt iTunes song sales, but give them a place in the on-demand streaming game.
Lala recently announced deals with Facebook and Google Music which promise to grow traffic and awareness of the service. The service had been reported to be in trouble financially. No word on the price that Apple paid on the deal.
News Corp owned MySpace will purchase independent online music service Imeem, in a deal which is reported to be $1million in cash. Imeem has been in financial trouble for a while, and has run through an estimated $30million in investor dollars.
Among the investors, all four major record labels, although earlier this year Warner Music wrote off its investment in the service. In 2007, Imeem became the first ad supported on-demand online music service to negotiate deals with all four major labels. Those deals included equity which made partners of the four major labels. MySpace also has partnership deals in place with the four major labels.
A few months ago MySpace acquired online music service iLike, with 50 million registered listeners, for a reported $20million. Comscore estimated that Imeem had 16 million unique visitors in September. It’s impossible to compare these two numbers except to say that it doesn’t sound like Imeem is a lot smaller than iLike to me.
MySpace now owns two of the five online music services that announced partnerships with Google’s new music platform. The way that works is that Google drives traffic to partner sites who play the music and pay the royalties.
Recently Spotify delayed their US launch due to problems negotiating a license for ad supported on demand streaming with the record companies. Plug that info into the fact that Imeem was about to get acquired by MySpace for so little, and it’s easy to understand why Spotify is meeting with some opposition. Seems like the record companies want to limit their exposure on the ad supported revenue model…