In another disappointment for U.S. music fans, Apple announced last week that it would shutter online music service LaLa on May 31st— only months after purchasing the company for over $80 million in December 2009. Started in 2006, the company allows users to create and share music playlists, access music collections from any computer, purchase MP3s, or buy the right to stream songs indefinitely for ten cents. The site gained notable exposure in the music community when taste making blog Pitchfork Media began using LaLa widgets and playlists to accompany it’s music reviews. The announcement leaves room for speculation as to Apple’s motivation and its next move in the music space.
Many predict Apple will use LaLa’s “cloud” technology to launch a music subscription service within the iTunes platform– LaLa, unlike iTunes, stores music on servers which users can access in addition to direct dowloading. In a world of lost iPods and constantly updating technology, that convenience could add substantial value to an already established brand. The Wall Street Journal also reports that Apple will likely start an iTunes.com site this year empowering users to play music without the currently required iTunes software. This would open Apple’s music business to a larger audience and position the company to tap into a growing mobile market. Forrester Research projects that today’s 2.1 million music service subscribes will mushroom to over 5 million by 2014, due in part to an expansion of music streaming on smart phones. Continue reading “Why Apple shut down LaLa”