Ever since Apple purchased Lala back in 2009, it’s been assumed that iTunes was going to make a leap into the cloud with a streaming music on demand service pretty much any minute now.
According to a new report by the Financial Times, though, Apple’s just been messing with us: Apple has no intention of undermining the market for paid music downloads that it absolutely dominates.
Instead, Apple keeps its plans for the cloud and its Lala acquisition as a form of insurance. An ace up their sleeve, in case the likes of Spotify, Rhapsody or Last.fm looks posed to become an industry-shaking juggernaut, similar to the way Netflix is changing the home video market.
If true, Apple’s cloud ambitions have nothing to do with subscription streaming. Instead, the cloud would be used to reinforce Apple’s domination of paid music downloads.
This seemingly gels with recent rumors that Apple’s streaming iTunes aspirations take the form of a digital, streaming music locker, and not a subscription radio service.
Additionally, at the most recent shareholder meeting, Apple claimed its new North Carolina Data Center would be used for “iTunes and MobileMe,” yet MobileMe subscription sales are reportedly listed as end of life at Apple’s retail stores.
For me, this all implies we’re about to see the rollout of a Mobile Me backed iTunes music locker, in which paid tracks can be stored and streamed from any internet connection. That model would not undermine Apple’s supremacy over the downloads market, but instead capitalize upon it. If so, we may see a blush of this new Mobile Me at next week’s March 2nd iPad event.
John Brownlee is a writer for Fast Company, and a contributing writer here at CoM. He has also written for Wired, Playboy, Boing Boing, Popular Mechanics, VentureBeat, and Gizmodo. He lives in Boston with his wife and two parakeets. You can follow him here on Twitter.
17 responses to “Report: Apple’s Bought Lala As “Insurance,” Won’t Undermine iTunes Dominance With Streaming Subscription Service”
This approach by Apple makes no sense to me. They would undermine iTunes dominance by not introducing this. As Jobs has said before, he would rather a product made by Apple cannibalize it’s own property instead of letting a competitor do so.
As it is now Ping is absolutely worthless because no one is going to buy a song, much less a playlist of songs, solely on a friend’s recommendation. From what I’ve seen of pop-happy teens today, they view music as disposable or a fashion trend. Apple could potentially make more money by having a steady stream of monthly payments from their large user base.
It would make Ping, Genius and social playlists that much more relevant.
I don’t agree with you on this. As a parent, I’m not going to pay for my teen to have a subscription music service, however I will give my teen an iTunes gift card from time to time and so would other family members (for birthday or other occasions). As far as I’m concerned with companies like Pandora out there paying for streaming music doesn’t make sense, I don’t care how much you can customize it.
I don’t think the correct approach for Apple is to make “iTunes in the Cloud” only a service where you are required to purchase individual tracks or albums before streaming. I used to buy a lot of albums and individual tracks through iTunes, but I could never purchase enough tracks (within reason) to satisfy my desire for VARIETY in music. I subscribed to “Pandora One” recently for that reason. For the yearly price of less than ~30 tracks through iTunes (depending on track price), I have access to an almost-unlimited number of tracks. Yes, on Pandora I can’t specifically choose the songs I want to hear when I want to hear them, but with some fine-tuning I get the types of songs I want with the variety I desire.
I didn’t know you could pay for Pandora. I’ve never used it enough to know there was a time cap per month. That being said, you and I have very different tastes in music, unless I really like a song I’m not spending money on it, so my library is very select. And there are more then enough free quality internet radios out there to keep me from paying money.
Interesting and useful post
You can always have both! and in our case we could use the iTunes Cards and others the Subscription, its good to have choices xD
The catch is that kind of ‘restricted to purchased via itunes’ could be the only way to get the labels in on the game. So that could be the way they are going and the reason why. At least for phase one. Perhaps also the Lala style streaming only for a lower fee, now or maybe in phase two.
Keep in mind that you can also upload whatever music or even videos you want to your idisk (if you are on mobile me) and play them over the internet. so the rest of your collection would be covered for many folks.
Actually studies would tell companies just the opposite. People are more likely to take a recommendation from a friend than a total stranger. Ping was the social add on to the total stranger approach of Genius.
And keep in mind that we now have longer previews so no one is really asking you to buy just from the name dropping
Wow. Buying out a competitor just to shut them down!
How Microsoft of them.