Did Apple buy the Lala music service just to shutter the competition? The iTunes operator acquired Lala last December. Just months later, the streaming music service has announced it will cease to provide service as of May 31.
Lala offers its customers Internet access to a music library such as iTunes. When it launched in October 2008, the site set out to replace what its founders viewed as an outdated approach to uploading MP3 files from a PC. Lala uses licensed technology to instantly match songs from a consumer’s personal music library with the web-based catalog on lala.com.
In what appears to some analysts as an abrupt announcement, web songs, wallets and gift cards are no longer available for purchase on Lala. Uploads have been discontinued, and the company is not accepting new users for the service.
“Any MP3 songs purchased and downloaded from Lala will continue to play as part of your local music library,” the company said in a message to its members. “You can continue to purchase MP3 songs through May 31st using your wallet balance or other payment methods.”
What Are Apple’s Plans?
Phil Leigh, a senior analyst at Inside Digital Media, is betting Apple plans to offer a service similar to Lala as an innovative component of iTunes. Apple hasn’t commented, nor is there any indication of when Apple might launch a streaming iTunes service. In the meantime, competitors like Grooveshark could gain some momentum.
Noteworthy is the fact that Grooveshark offers an application for mobile phones — but not the iPhone. Apple hasn’t approved the Grooveshark application for the iPhone, but it’s available for Android-based phones. Leigh called Grooveshark’s ability to ink deals with the labels for mobile services significant.
“If Apple can get the same type of label deal Grooveshark has, the company will be able to offer something similar to Lala through iTunes on the iPhone as well as on your computer,” Leigh said. “That’s significant because about 60 percent of music listening is done from the automobile, so that would let you play the mutant form from Lala service through your car stereo on an Apple device.”
Want a Refund?
Lala is offering refunds and credits to existing members. Lala said members would receive a credit in the amount of their Lala web song purchases for use on Apple’s iTunes Store. Members who have outstanding wallet balances on May 31st will also receive an iTunes Store credit for that amount. Members who don’t want an iTunes credit can get a refund check.
Gift cards can be redeemed on Lala until May 31st. Lala said the gift-card amount will be added to members’ wallet balances, and included as part of the wallet balance refund. iTunes Store credit amounts will be rounded up to the nearest $1 for refunds under $10, or to the nearest $5 for refunds greater than $10.
Lala was a clear iTunes competitor. Members can sample any full song or complete album free, add songs to a web collection for 10 cents, or buy DRM-free MP3 downloads for an additional 79 cents. Lala drew cooperation from EMI Music, Sony BMG Music Entertainment, Universal Music Group, Warner Music Group, and more than 170,000 independent music labels – and now it has the attention of Apple.
