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Apple shuts down Lala

Lala is shutting down
The Lala service will be shut down on May 31st, 2010.

Unfortunately, we are no longer accepting new users.
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The announcement on its Web site has prompted speculation that Lala’s owner Apple Inc. is ready to make use of Lala’s staff and technology to roll out its own cloud-based service. Apple acquired Lala in December 2009 for an undisclosed sum.

Lala launched in March 2006. It claimed to have 8 million licensed songs available for registered users. It was reported that Apple acquired Lala for $80 million, although TechCrunch said it was actually much lower – $17 million. A proxy statement filed by Lala minority stake holder Warner Music Group later suggested it wasn’t even as high as that.

Paid Content:

Five months after buying the web-based music service, Apple (NSDQ: AAPL) is now shutting Lala, in what is likely preparation for a web- or subscription-centric upgrade to its own iTunes Store. The site has stopped accepting new sign-ups and will shut to existing users on May 31, says a message on Lala.

Against both the web and subscription rise, iTunes’ a la carte reliance looks archaic and one-dimensional, tooled for a market that’s plateaued….Reports, at the time of the acquisition, that Apple fancied Lala’s “payment and fulfillment systems”, suggest it’s also interested in subscriptions. It’s not clear whether it will launch a web-based service, a subscription offering or a combination of both, though a few industry sources I’ve spoken with speculate it will launch an underwhelming “locker”-type service, to house already-bought tracks in the cloud, before going all-out on subscriptions proper.

iTunes’ flatlining has created an opportunity for new services to race to a legal music gold rush, in a space partly created by a growing number of anti-piracy moves by international governments. The labels can’t wait.
…depending on what Apple does with Lala, rivals should be very concerned. Rhapsody and Spotify may be looming, may have an attractively-priced service and is on the horizon. But none has iTunes Store’s existing heft