December 04, 2009

By By Antony Bruno, Denver

Apple is in ?advanced negotiations? to acquire online streaming music service Lala, first reported on CNET, in a deal that will significantly shake-up the digital music landscape. Billboard has independently confirmed the news with sources.

The deal will give Apple?s iTunes digital music store?the dominant music retailer of any format in the world?the ability to stream songs in full, currently a feature it sorely lacks. iTunes only allows 30-second song samples. It will also allow Apple to sell Lala?s innovative ?online-only? tracks. For 10-cents, Lala allows users to buy a streaming-only version of a song that they can then stream from their computers. Lala has also been in the process of developing an iPhone app that would let users stream those same songs from the popular smartphone.

The increased penetration of broadband Internet access, paired with the proliferation of Internet-connected portable devices like the iPhone and other smartphones?is quickly changing the digital music model from a download-only paradigm to a streaming access one. Because streaming music from a portable device is approaching the same level of quality and reliability as playing a stored track, there soon may be less of a need to buy a file.

Apple has long voiced the opinion that paid monthly subscription services were an awkward way to give music fans that streaming opportunity. But Lala has a more unique model. It lets users stream any song once for free, before prompting them to buy either the 10-cent permanent stream or an 89-cent DRM-free download.

Lala also has been at the center of several high-profile partnership in the last year. The latest is with Google, which lets users stream songs from music-based search results. Lala also provides streaming music services for Billboard.com, Pitchfork, and a gifting service from Facebook.

Stay tuned to Billboard.biz as this developing story unfolds.

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