Dissecting Apple’s Lala threat
If you don't think there's a bigger play in motion, then you don't know Apple.
Since launching in 2003, iTunes Store, to the labels, has been a welcome bulwark against what would have otherwise been even more chronic decline. It now contributes over a quarter of U.S. music sales. But, in a North American music market that’s now shrinking faster than anywhere in the world, digital income has now basically flatlined, growing just 1.1 percent in 2009, says the industry’s IFPI.
If the digital music industry is flatlining, it's time for innovation to spark some growth.
Enter Lala – or at least some of the capabilities of Lala, including the prospect of subscription access to unlimited music based not on your PC or your mobile device, but in the "cloud" and streamable to you wherever you are and on whatever device you choose (except for a traditional radio of course).
Many observers think this is an advance over the a-la-carte model of iTunes which is, well, so 2001.
While all-you-can-eat music services are not new (Rhapsody, Spotify, Mog and more to come), having one attached to the sizable heft of the iTunes store and its 125 million user accounts IS new.
As PaidContent says,
Flipping them from occasional, one-off payments to recurring debits of, say, $9.99 a month, could create yet another massive new income stream for Apple, which has already introduced recurring subscriptions to its mobile apps.
So what does all this mean for radio, you ask?
More of the same, I'd say.
More alternatives to the radio options already squeezed trimmer by satellite radio and Pandora and the rest.
More reasons to try something new with a value proposition that's different, if not better, than radio's.
Yes, radio remains free. But its fundamental value isn't just in its free-ness, it's in its ease of use and its ubiquity. And nobody understands elegance, ease of use, and ubiquity better than Apple.
Is it worth a monthly fee to skip over free radio – even free Pandora – or overpriced and clunky, non-personalized satellite radio?
That depends on what Apple offers.
And, frankly, it depends on what radio offers.
In case you think all of these new options will not cannibalize radio to one degree or another, I have a question for you:
How many minutes can you add to a 60-minute listening hour?