Apple Kills Lala Streaming Music Service, But What Does it Mean?


As you may have heard, Apple plans to shut down streaming music service at the end of May, a company it purchased only recently in December of last year. At the time, speculation ran rampant that Apple was planning on using the service to launch its own streaming music venture, probably for use with iTunes and the company’s varioius iDevices.

Lala features an 8 million song deep catalogue, which can be streamed by any user once for free. If you wanted to play the song more than that, you paid 10 cents and received unlimited replays. Download purchases were also available, starting at 79 cents per track.

No new users are being accepted to Lala as of last Friday, and the website will be shuttered entirely on May 31. That means anyone who paid for unlimited streaming options will also be cut off at that time. Apple has said it will be refunding paid subscribers with iTunes credit in order to compensate, but of course iTunes can’t match the 10 cent unlimited streaming deal.

So what’s Apple’s end goal in buying and then fairly promptly killing the service? Speculation abounds that it wants the intellectual property and staff in order to create its own rival to popular services like Pandora and, while still funnelling yet more consumers to its hardware line.

But is it actually time for Apple to bite the bullet and accept that cloud-based streaming is the future of media distribution? I think the answer is no. Cupertino knows it doesn’t have to be ahead of the curve regarding media distribution so long as it continues to lead the way in media playback devices. iPod is still the category-defining brand in that regard, and the iPad’s million unit milestone just recently proves that Apple isn’t yet done reshaping the market according to its own vision.

Apple is shuttering at the end of the month, that much is inevitable. What is far from inevitable is that this move will somehow lead to Apple launching its own streaming music service to fill the void. It’s much more likely that Cupertino made the purchase (which was barely a drop in the bucket, in terms of purchase price) to scope out the streaming music service from the inside, pull it apart and see how it ticks. From that vantage point, it would be that much easier to make an informed decision about how quickly Apple had to move into the space, and I’m willing to bet that what they found out is that there’s no hurry.

Shutting down Lala probably just ends a resource bleed and eliminates a potential iTunes competitor now that Apple’s gathered enough intel. So if you’re saving that iTunes credit they gave you for closing out your account for when Apple launches its own streaming service, don’t, unless you feel like waiting a long, long time.

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