Apple Said to Be in Talks to Buy Online Music Service Lala
Dec. 4 (Bloomberg) — Apple Inc. is in talks to acquire online music service Lala, according to two people familiar with the matter. — The terms of the deal for privately held Lala weren't known.
Context & Ripple Effects
Lala arrives at this moment with a working cloud product already in Apple's ecosystem: its iPhone app streams a user's music library from the cloud rather than storing files on the device, a direct counterpoint to the iTunes download model. A year earlier the startup was positioning itself as a bidder to run a music service inside Facebook, so an acquirer would be buying distribution ambition as much as technology.
Bloomberg's report — sourced to two people familiar with the matter, with terms undisclosed for the privately held company — is unconfirmed, though CNET's same-day pickup describes the talks as "advanced," suggesting the deal is further along than a routine rumor. For Apple, the strategic logic is visible in what Lala already does: it is the only credible way to add cloud streaming to a portfolio built on paid downloads.
First-order effects
- Apple would fold Lala's cloud-streaming technology and team into its music operations, putting a streaming capability alongside — rather than instead of — the iTunes download store.
- Lala's independent partnerships, including its earlier pursuit of a Facebook music tie-in, would come under Apple's control, removing an independent cloud-music player from the market.
Second-order effects
- Rival device makers and music services lose their most obvious neutral cloud-streaming partner, pushing them toward building or buying their own cloud music stacks.
- Record labels gain a second negotiation front: licensing for cloud streaming and locker-style services becomes a separate conversation from download-store wholesale pricing.
Third-order effects
- If Apple ships a cloud music service built on Lala, the industry's center of gravity shifts from files consumers own to libraries hosted by the platform that also sells the device — extending Apple's gatekeeper position from hardware and apps into media storage and access.
The trend: Digital music is migrating from purchased downloads stored locally to cloud-hosted libraries controlled by device-platform owners, and Apple's reported Lala pursuit is a data point in that migration.