Apple Pondering Music Streaming?

CNET is reporting Apple is in an “advanced” stage of talks with music service Lala, according to a pair of sources, one of which asserts that terms have already been agreed upon. If so, such a deal could portend big changes in how the iTunes Store does business.

Lala launched in 2006 as a CD trading website, followed by more permanent changes to its business model. Lala now sells DRM-free MP3s for as little 89 cents, as well as “web songs” for 10 cents. According to Lala, a “web song is a song that lives on the Internet,” that dime getting you unlimited number of plays from a web browser, which isn’t a micro-subscription at all. Yeah, this sounds exactly like what Apple is interested in.

Since the inception of the iTunes Store, Apple has been unequivocal in its opinion of music subscriptions—by any name—and often that non-equivocation has come from Steve Jobs. In a 2003 interview with Rolling Stone, the Apple CEO explained the intrinsic problem with “web songs,” that you don’t own your own music. He then added this Jobsian gem.

I think you could make available the Second Coming in a subscription model and it might not be successful.

So has Steve Jobs suddenly found his infinite plays of his own Personal Jesus by Depeche Mode for just ten cents? It seems unlikely. More likely, Apple may be interested in Lala because Google is interested. Lala recently partnered with Google for the search giant’s music service, and more recently Google acquired AdMob. Shortly before that acquisition, Apple was supposedly in talks with AdMob. However, while buying AdMob might have kept Google away from the App Store, Apple buying Lala won’t stop Google from seeding the Internet cloud with music.

There is another possibility, though. Lala also has a Music Mover service that lets users upload their collection and make it available “anywhere on the web.” Like an iPhone. At least, that would be the theory, though the reality of AT&T’s network might be a problem. Another problem to consider, at least for Apple, is what’s the point of buying a 32GB iPhone if 20GB of your music is in the cloud? It’s that latter issue that makes this a curious move for Apple, if a purchase of Lala is indeed Apple’s next move.