Wednesday, December 16, 2009

Music cloud

With its deal this month to buy the Web music service Lala, Apple may be pointing the way to the future of music. In this future, the digital music files on people’s computers could join vinyl records, cassette tapes and CDs in the dusty vault of fading music formats.

I have all three formats.

Instead, music fans will use their always-online computers and smartphones to visit a vast Internet jukebox, where Gregorian chants, Lady Gaga tracks and the several centuries of music in between are instantly available.

For a fee.

The idea of a limitless jukebox in the sky — or in tech-speak, “in the cloud” — has been around for some time, but it is consuming music executives who now associate the word “funk” with more than just a musical genre. The recording industry, which had $40 billion in annual sales a decade ago, is now bringing in half that. More ominously, the growth of revenue from digital downloads, still only a fifth of the total sales pie, is slowing.

New business model to capture greater revenues.

With an estimated $2 billion in annual revenue from iTunes, Apple is in a good position to guide consumers through the process of storing their music collections on Web servers and listening to them in new ways. It can also tightly integrate such a music service into the iPhone, the iPod Touch and all other existing and future Apple gadgets that connect to the Internet.

And all the music that has been downloaded? Such is progress.

David Pakman, a partner at the venture capital firm Venrock and the former chief executive of the download service eMusic, said that Apple “could accelerate the move to media in the cloud more quickly than any other company can.” The acquisition of Lala, he said, “tells us they’re doing it.”

Meanwhile, MySpace, owned by the News Corporation, has acquired two cloud music services in the last month, iLike and Imeem. People briefed on discussions inside MySpace say it is developing a subscription music service to complement its free, ad-supported MySpace Music, a joint venture with the four major music labels.

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