Four months after buying Lala Media's popular online music service for a reported $80 million, Apple is pulling the plug on the 5-year-old site.
Lala notified its users in an e-mail Friday morning of the shutdown. Apple Inc. spokesman Jason Roth confirmed the plans, but he declined to say whether the Cupertino, Calif., company would resurrect the service under Apple's iTunes brand.
Lala lets users listen to any song in its catalog in its entirety once for free. After that, listeners can sample the song again for 30 seconds or buy a digital download of the song for 89 cents. What separated Lala from other music services, however, was its concept of a "Web song." Listeners could play a song an unlimited number of times for 10 cents, as long as they were connected to the site.
With iTunes, downloaded songs are stored on a user's computer and can be copied to other computers and devices. Web song files sit on Lala's computers and can be played only while the listener is connected to the Lala site. This is sometimes called "cloud" access.
There has been much speculation about whether Apple would use Lala's technology to create its own music-streaming subscription service to compete with Rhapsody or MOG, which charge monthly fees for on-demand access to their extensive song catalogs. Another possibility is that Apple could use Lala's cloud approach to let customers who purchase a song from iTunes also have online access to that song in a sort of pay-once-play-anywhere idea.
Though cloud computing offers convenience, the downside is clear in the case of Lala. Many users who have spent years diligently building their "digital lockers" on Lala woke up to find that those collections will evaporate on May 31.
Lala said it would compensate users, telling them "you will receive a credit in the amount of your Lala Web song purchases for use on Apple's iTunes Store. If you purchased and downloaded MP3 songs from Lala, those songs will continue to play as part of your local music library. Remaining wallet balances and unredeemed gift cards will be converted to iTunes Store credit (or can be refunded upon request)."