Much of the discussion about Apple this week focused on its acquisition of Lala, a service that lets US customers not only buy MP3 songs but buy the rights to stream them in real time at the almost nominal price of $US0.10 ($A0.11) per song.
The potential implications of the purchase are many, varied, and hugely interesting as Apple works to maintain interest in its iTunes application. In today’s ADD-ridden online culture, of course, maintaining interest requires constant introduction of new and jaw-dropping features. And while I’d be happy just to see a Finder that sized windows and columns correctly, Lala changes Apple’s business in an entirely different area by finally giving Apple a ready-made mechanism for delivering songs online, on demand, and without having to download them first.
This last point is a big one. iTunes is inherently designed around the download-and-own model rather than facilitating the streaming of songs, although it is quite able to stream Internet radio and music previews. So far, however, Apple has not jumped on the streaming-songs bandwagon; I suspect there are legal, rather than technological, issues at foot here that may date back to the days when iTunes required the entire song file so it could maintain the integrity of the security envelope that was digital rights management (DRM).
DRM gone, all bets are off as to how an Apple music streaming service might eventuate. The most obvious approach would be to replicate Lala’s current model, in which Lala keeps all the music files and customers buy access to individual songs. This suits budget buyers and those continually connected to the Web, but it won’t suit those who are accustomed to Things You Can Do When You Own Music – for example, burning songs to disc or sharing them between computers using Home Sharing.
The more important part of the Lala deal may thus be the rights Lala has negotiated with music companies to enable streaming to happen in the first place. As Lala’s new parent company, Apple will assume these rights and could thus jump into something of a privileged position when it comes to music streaming; I’m not a lawyer, but I assume there are different royalty structures for streaming music.
Lala’s service certainly opens up the possibility of upselling, which Apple loves as much as life itself (witness the Genius feature, Complete My Album, the upgrade to higher-quality iTunes Plus, etc). Apple could use Lala’s streaming library to hook customers on songs at a very low price (or even, if it dared, for free by offsetting the cost with advertising); it could then help customers upgrade to buy the entire song if they wanted to own it outright.
The most exciting possibility, of course, is that streaming could finally enable the subscription music service that rivals have offered for some time. You could subscribe to channels of music in different genres, with Apple’s Genius analytical engine reworked to suggest songs you don’t own based on the songs you do. Your monthly fee would provide unlimited access to the new songs, and if you wanted to buy them you could simply pay the difference.
Such a service would work a treat over wired broadband services, and might even give people a reason to buy Apple TV. And while such a service could easily be extended to the iPhone or iPod touch, Apple would likely have to limit it to WiFi access only since carriers are already struggling with the data load iPhones are putting on their networks. Telstra, of course, would hate the service because it would be yet another nail in the coffin of BigPond Music – unless Telstra and Apple could find some mutual benefit in the new capabilities.
However it eventuates, Apple’s acquisition of Lala signals interesting times ahead (even if the usual licensing agreements mean we’ll be lucky to see it in Australia before next Christmas). Expect more concrete details with the launch of the fully 64-bit iTunes X and new software to make the streaming possible to iPhone and iPod touch. Until then, just keep fa-la-la-la-la-ing amongst yourselves.