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Apple Reportedly Buys Lala Music Service

Apple took what could be a step toward adding a subscription-based music services to its offerings Friday when it bought Lala, a company that delivers music via the Web to its users.

Rumors circulated around the Web throughout Friday that Apple was in talks to buy Lala. The New York Timesconfirmed the purchase late Friday, citing a person with knowledge of the deal.

The Wall Street Journal also reported the Lala purchase as a done deal. "Apple buys smaller technology companies from time to time and we generally do not comment on our purpose or plan," Apple spokesman Steve Dowling told the Journal.

Neither the Times nor the Journal could reach Lala representatives to confirm the deal.

Based in Palo Alto, Calif., Lala lets users listen to a catalog of around 8 million songs for free through the Web. According to Lala's site, users can pay 10 cents for unlimited plays of a song; they can also download an MP3 version for 89 cents. The MP3s come without digital-rights management restrictions, making them compatible with iTunes and Windows Media Player.

If Lala is now part of the Apple fold, it would mark a departure from the approach that Apple has taken to music since launching the iTunes Store in 2003. The iTunes Store has always offered music on an a la carte basis, with users paying to download specific tracks and albums. Apple executives--including CEO Steve Jobs--have repeatedly argued that customers like to own their music. "Customers don't seem to be interested in [subscription-based music services]," Jobs told Reuters in an April 2007 interview. "The subscription model has failed so far."

More than two years later, that may no longer be the case. While the iTunes Store continues to thrive--the online store became the nation's top music retailer in 2008--subscription-based services like Rhapsody (which even offers an iPhone app) and Spotify in Europe are carving out their own share of the digital music market. Apple's interest in Lala could be a sign that the company wants to expand beyond its pay-per-download approach to music.

We'll have more details on the Apple-Lala deal as they become available.

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