Here's a Swan Song for Lala as Apple Axes the Music Streaming Service

Lala site

Lala, the music streaming company bought by Apple at the end of 2009, will be dead in a month. It posted a message on its Web site last night to that effect, that said, "Lala is shutting down on May 31. Unfortunately, we are accepting no new users." Sounds to us like iTunes is cloud-bound. And, if it is to be, what form will it take—are we seeing the end of users buying music to own? What effect will this have on existing music streaming sites, such as MOG, Rhapsody, Pandora, and Spotify?

Both Pandora and Spotify have already embraced their inner social networker with Facebook-friendly features, as has (slightly less related, this, but nevertheless significant) Apple's app store. MOG's mobile apps and unlimited download service is on its way, in a move that could head Spotify off at the pass when it eventually launches Stateside—rumored to be some time after the summer.

But its their respective relationships with Apple that is interesting: All of them have iPhone apps (although they all work in slightly different ways)—Rhapsody's offers offline music streaming via subscription, both MOG and Spotify's are bog-standard versions, and Pandora recently collaborated with Apple at the launch of the iPhone OS 4. Maybe Apple is already doing a deal with Pandora in an attempt to consolidate its market position, in the same way it did with chip makers PAsemi and Intrinsity.

Apple's secrecy—when not breached—is, frankly, a pain for people outside its circle of trust (basically, every single person in the world apart from Steve and his consigliere). But it will be interesting to see how it deals with the cloud- versus fixed-music question—and whether we're seeing the end of the fixed version of iTunes as we know it.

Likely, no. iTunes is an enormous money-spinner for Apple, and no doubt the music and film industry would be up in arms at such a move. Its best move would be a mixed model, offering consumers the choice of either "owning" songs or having continual access to them via a subscription service. If users feel that they're getting value for money (undoubtedly Apple will offer a subscription service at a more expensive rate than MOG's current $10 a month, and Spotify's rumored $14 because it can) then the upshot of this could be less pirating of music, keeping the record labels happy.

Now, let's bring iAd into the equation. Apple's mobile advertising platform could easily be used, a la Spotify and Peter Gabriel's We7 to offer a free model supported by commercial spots, or "blipverts." But when was the last time Apple gave anything out for free? The firm is more likely to use iAd to bring a cut-price service rather than a free one, which will give the existing music streaming sites that offer a free, ad-supported service, a breather.

So, as of June 1, Lala will be no more. June sees two—possibly three—events that are important to Apple: its WWDC developers conference, Steve getting all cozy on the All Things D sofa with Walt and Kara, and the iPhone 4 launch (er hang on, didn't we have that last week?). Could this be when iTunes launches iTunes.com? It's almost too important an announcement to tag onto the end of another launch—although Steve kinda did that at MacWorld 2008 when he launched the MacBook Air (although we all knew that something big—or thin—was happening that day). But maybe, because music streaming is not a concept that Steve can claim to have invented, like the (click)wheel, it will be a low-key affair. Make no mistake about it, however: It's going to be cloudy for iTunes this June.

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