Saturday, December 5th, 2009...7:45 AM
Apple Tunes Up With LaLa?
Reports are out that Apple is near or has agreed to the acquisition streaming music company LaLa. This is a very interesting development in the game of positioning for the next wave of growth for digital music.
LaLa is a four-year-old start-up based in Palo Alto, California. Lala, unlike Apple’s iTunes, lets users play the music they own from the Web from the cloud. Apple’s iTunes lets users download music they buy from Apple. Two different models with alot opportunities of integration. Two different models that might appeal to different generations too.
I am a big Pandora fan and have posted about it on this blog. I listen to Pandora @ the office all the time on my Mac. It is a very easy to use and customizable streaming service. As I continue to listen and select the artists and songs that I like, Pandora is learning my preferences and delivering more and more music to meet my tastes. I also listen to Pandora on my iPhone and all my account information flows over through my one account. I have bookmarked many songs and artists for easy purchase on iTunes later (Amazon is integrated too). So in a rudimentary way I have integrated my Pandora and Apple experiences. I also come from a generation that was used to buying cds…so media ownership is kind of embedded into my dna.
LaLa has rolled out two monster relationships in the last month.
The first is integrating their music streaming into Facebook’s virtual goods offerings. So all of us Facebook users can send a cool digital balloon to a friend on their birthday. Another option is to send a favorite song to a friend for a birthday (which I did just last night) or for whatever reason (which I also did last night sending a Holiday tune to another friend). This is a massive opportunity for distrubtion of the LaLa service.
The second is integration of the LaLa cataloge into Google’s search. When you go to Google and search on James Taylor, at the top of the results will be several of JT’s tunes. Click on them and up comes the LaLa widget so you can listen to the selected tune. Google offers text links to others like Pandora, but LaLa is the most prominent and fully integrated. These are two blockbuster distribution deals!
I mentioned that media ownership is important to me, but I am still very interested in a more seemless integration of the download and streaming experience. I would love to leverage the cloud for access to “my” owned and borrowed catalog. It would be cool to access this from my Mac, iPhone, home entertainment center or at my friends house whenever I want. This is where it is going.
Younger consumers don’t seem as fixated or interested in media ownership. We have just lived through an interesting era where the notion of all media being “free” was an accepted norm through poor digital rights management, pirating and more. The underlying theme there though is that younger generations see some media available for free (or ad supported)…so why is this not the case for music, movies, etc. The impact on this is far ranging and one example of this is that younger generations do not feel they need to own their media. Access to the cloud for free is what they want. LaLa enables this and less expensive opportunities for purchasing as well.
Kudos to Apple for this move. The NY TImes seems to have deadpanned this as LaLa being a company going know where. I disagree wholeheartedly. LaLa is a nimble company that has tried a few business models, but they have something that is very important today. It is my hope that they will pursue a strategy of seemless integration of iTunes with LaLa. I will keep an eye on this and keep you up to date here.
6 Comments
December 5th, 2009 at 8:44 AM
Jeff -
Couldn’t agree more with your take (and opinion on the nytimes piece). I have used Lala for the last year and think (along w/Pandora) it’s the best music site available today. Three reasons I love it:
1. It is the best way to sample new music (you get one free listen of any album). Every Tuesday when new music comes out, I can log onto lala, add the new albums I’m interested in to my queue, and have a super easy, free way to decide if I want to invest in that album for repeat listens. I think this is a HUGE reason Apple has acquired them – think of how that functionality could impact iTunes shopping.
2. If I decide I’d like to buy a new album, it costs me about 80 cents to “own” that album on the cloud. Given how pervasive access to the cloud is becoming, and will be, this is a steep discount to the 10 bucks I’d need to shell out to download the same album. Perhaps another, defensive reason Apple took the step it did.
3. You write “I would love to leverage the cloud for access to “my” owned and borrowed catalog”. Good news: you can, now, on Lala (through the Lala Music Mover). They don’t yet have an iPhone app and their integration with hardware like the Logitech Squeezebox is not fully integrated yet, but I’m sure it will be, and then your vision of your music everywhere from the cloud will be realized.
To me, the big question is will Apple enhance and strengthen the things that make Lala such a great service, or will they diminish some of those capabilities since they are so potentially disruptive to the approach they’ve carved out to date.
December 5th, 2009 at 8:48 AM
Josh -
Thanks for the comment and sharing your experiences with LaLa for all of us. It is my hope that Apple will enhance this and not just kill it. This disruptive offering could add an incredible dimension to the Apple strategy! -Jeff
December 5th, 2009 at 9:08 AM
Great post. I completely agree that the cloud will overtake personal media ownership. Location independence and sharing capabilities are a return to the way media has historically been consumed; media ownership in silos is actually the anomaly. Up to the advent of movies and recorded music, when families wanted to listen to music, Uncle Joe would “on-demand” play the piano and family and friends would sing a long. Or they would go to the theater. And books have always cycled into and out of our houses, because we only have so much room and desire to re-read them. Twentieth-century technology greatly expanded choice, but only serious fans truly embraced the role of being a “curator” of their own libraries that came along with this. Now technology is coming full circle, by returning media to its natural state.
December 5th, 2009 at 9:27 AM
Thanks Adam. I agree with your view that media is being returned to a natural state. This applies to these new forms of digital distribution with http://www.lala.com. It applies to distribution and sharing of packaged media as well with cool sites like http://www.swaptree.com. Media is to be consumed and shared. It is a very important source of information and entertainment. Media has also always been social bringing people together…nd the web is enhancing the social connections and sharing around media now as well.
December 5th, 2009 at 5:54 PM
Hi Jeff
I’ve been following LaLa for ages (I think they started 5+ years ago, not 4)
The NYTimes didn’t say LaLa had no ideas or traction; rather the company itself has had to admit that they have no path to profitiability, or even hugeness.
That plus the fact that LaLa has raised a huge amount of venture capital made the company a “dead man walking” – consuming big amounts of $$$ but unfundable. Investors had already wrote down their investments twice, I think (Public company Warner Music publicly disclosed their writedown.)
The moral of the story if there is one, is successful innovation does not necessarily begat successful investing…
December 5th, 2009 at 6:07 PM
Thanks for the comment Steve. I think the moral of the story according to Steve Kane is spot on.
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