A small, but interesting tidbit. Word has leaked that Apple has agreed to acquire the hybrid streaming-download music service Lala. Unlike other streaming services, Lala is not subscription-based so it fits nicely into Steve Job’s view of the online music world. Lala is more of a cloud-based iTunes. If you keep your music on the cloud and stream it, you pay 10 cents to add it to your collection. Downloading a song costs 89 cents. Lala also has a nifty technology that allows the user to upload his MP3 library to Lala. Any song in Lala’s catalog is linked to the Lala version, others the user can upload for free.
Assuming a proliferation of music playing devices with inexpensive Internet connectivity, the deal’s a no-brainer. It accelerates iTunes’ much needed migration to the cloud. You gotta love this business model from the consumer’s point of view. “Let me get this straight, you’ll store, backup, and manage my music collection on your storage with your infrastructure for 10 cents per song, or I can take on the hassle for 89 cents per song.” Apparently the model works according to a Wired article.
This Lala acquisition could also help iTunes increase its revenue-per-user. Steve Jobs admitted in 2007 that the average iTunes user had only bought an average of 22 songs. By contrast, Lala CEO Bill Nguyen told us in October that its paying customers spend an average of $67 on Lala music…
And don’t forget all of those wi-fi capable iPods to be sold.