Lala Means Apple Loves Streaming

I got a kick out of some of the radio industry comment that Apple was shuttering recently acquired Palo Alto-based Lala – a company it purchased less than six months ago for $80 million.

The presumption being that Apple was not going to be offering a streaming music service that was thought to be another competitor to terrestrial radio.

What is really happening – to borrow a phrase from the great Delfonics Philly soul song “La La Means I Love You” is that Apple loves streaming from the “cloud” so much it is shutting down the failed Lala site in favor of redeploying Lala's streaming technology.

Lala was founded in 2006 and never really made it as a purveyor of free streaming music and access to cuts for only ten cents a song. Apparently iPod usage and traditional online filesharing was more attractive than letting users upload their libraries to a cloud.

Apple knows this.

Apple watchers who risk life and limb when they try to guess what Steve Jobs is up to next have been chattering about Apple’s presumed plan to allow iTunes users the ability to keep their music libraries and videos on Apple servers so that they can access them via any Internet or mobile Internet device anywhere – anytime.

Unlike radio companies, Apple was looking to buy people and technology not necessarily a failed company – thus the expenditure to buy Lala.

Steve Jobs has been teasing the Apple faithful that he has many more cool products to offer this year. (Full disclosure: I have been and am currently an Apple stockholder).

This new cloud-based subscription service from Apple may become more than just speculation within the next few months – that’s what I’m thinking.

Interesting that is reporting that current Lala subscribers will get a refund worth one-tenth of the amount of music in iTunes that their money paid for on Lala.

So Lala will soon be dead but we can safely presume Apple didn’t buy the company to waste money.

Right now Apple is rolling through the media content business the way General Patton rolled through some battles in World War II.

There are going to be issues of great concern to media people of an Apple monopoly over electronic devices and content and I share those concerns although not enough to try to thwart the consumer revolution toward mobile Internet.

Apple is building a stranglehold on media delivery systems.

Fair to say it has the record labels by the balls.

In a few short years, Apple has become a major player in the cell phone business even with the unpopular AT&T as a mobile connect partner. And perhaps you noticed a significant strategic step Jobs took when he introduced the 3G iPad featuring a month-by-month option – no contracts – for the required AT&T service. Apple is that big and persuasive.

Now, publishers have mixed feelings about the bookstore that is becoming so popular on iPads. Publishers like that, unlike Amazon, Apple is letting publishers employ variable pricing, but other publishing houses fear that once Apple dominates the book market they will be at Steve Jobs’ mercy.

And that could very well be.

An ominous sign is that the variable price publishing option is only guaranteed for the first year -- at this point, anyway.

Radio owners know what happens when Jobs doesn’t like radio for his devices – they can’t get a chip built into popular mobile devices like iPods, iPhones or iPads – with the exception of the Nano. And that plus another few million listeners would not even make a difference for radio interests.

I think that Jobs wants to be Pandora.

There. I've said it.

Radio is not cool with Apple's young-targeted consumer base. And frankly, it’s hard to see an iPhone or iPod as a radio in the sense that the industry once saw the Walkman as a radio device.

If Jobs indeed wants to be Pandora, he could get started by offering a streaming service to his almost 150 million registered iTunes customers.

Keep in mind that’s 150 million active credit cards on file ready to buy things which could include subscriptions.

The thing with Steve Jobs is that when he says something publicly, he can be playing with the public. Jobs often disses that which he is eventually going to do at Apple.

The iPad would be a recent example.

In a sense, Jobs voted against it before he voted for it.

So Apple often says they are in it to sell electronics and the rest is just to help sell iPods, iPads, iPhones and computers.

Well, with all due respect to the most fascinating genius I have observed in a long time, I think Jobs is playing with us again. He is heading right into dominating the music business, publishing, newspapers, video and movie businesses and, yes, radio.

But not the radio industry its leaders still think has a chance with the next generation.

A new “radio” – streams of music and content that iTunes subscribers could sign up for and enjoy as an alternative to free music. That, in and of itself is incredible. Since when is free less desirable than paid?

That’s what is happening as large corporations figure out the Internet.

While television, radio, print, film and even gaming interests were out plying their trades, Apple was focusing on the changemakers – the young people that traditional media usually tend to ignore.

And now the threat exists that publishers will have to pay whatever Apple wants for inclusion in its mobile Internet empire or leave money on the table.

Yes, Apple is in it to sell electronics but with media executives asleep at the helm, you are now witnessing the first palpable signs that Steve Jobs is leading a frontal attack on these sleepy media businesses that let him bypass them and go directly to the consumer.

The critical difference is …

Jobs knows what he is doing.

Media executives know how to pander to Wall Street.

Think of the ramifications.

In five years, if everyone is accessing information and content on mobile Internet devices like the kind Apple sells – and that 150 million iTunes customer base just doubles – even the best over-the-air radio will be playing to deaf ears.

My message.

Tune into the consumer and let them drive innovation.

Build your content for Apple platforms no matter what the entry price.

Then learn to think like Steve Jobs and pray that some smart alternatives can compete with Apple someday.

Until then, watch the master at work as he eats traditional media executives alive in their own backyards.

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