Apple Just Acquired Two Streaming Media Startups. Here's Why

Over the weekend, the company spent at least $40 million on BookLamp and Swell.

If you discount bringing Beats into the fold from earlier this year, Apple's acquisitions have historically been low-key affairs. This weekend though, Cupertino certainly looked busy, when news broke that it had acquired two new startups to shore up its book and radio businesses. Let's take a look at the two startups, shall we?

Late Friday night, TechCrunch reported that Apple bought a book analytics company called BookLamp for somewhere between $10 million and $15 million. The Boise, Idaho-based startup specializes in making book recommendations using natural language analysis of text. It was said to be in the midst of building out a product described by TechCrunch as a "Pandora for books," and Apple could theoretically use BookLamp's technology (and tech talent) to drive more sales in iBooks. (And, perhaps obviously, to compete a little more directly with the elephant in the room: Amazon.)

Then on Sunday, Re/code broke the news that Apple had quietly siphoned up another company called Swell, which Re/code described as "the Pandora-for-talk-radio." It is designed, primarily, for listening to talk radio while driving, and could be used to bolster Apple's underwhelming Podcasts app, which has 1.5 out of 5 stars in the App Store. The deal is worth about $30 million.

So what? Alone, these deals don't reveal very much. But taken together they provide some interesting tea leaves into Apple's media strategy going forward.

After the iPhone, iPad, and Mac, Apple's fourth biggest revenue driver is iTunes. Although "iTunes, software, and services"—as it's officially demarcated in its official reports—generated $4.48 billion in Q3, growth is unquestionably slowing.

Via Macworld

And here are the year-over-year growth figures, which paint an even bleaker snapshot of Apple's digital media biz.

Via Fortune

In addition to books and podcasts, Apple's acquisition of Beats was, at least in part, a play to integrate Beats Radio into its mix. Streaming media is heralded in some corners of the tech world as the future of how we'll watch movies, listen to music and podcasts, and, yes, even read books. More importantly, though, these streaming businesses provide easy breadcrumbs back to the iTunes mothership, which, as mostly non-physical software, is one way for Apple to continue eking a few extra billions out of a product that looks to be on its way toward irrelevance.

[Image: Flickr user Chase Elliott Clark]

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