Recently the New York Times has reported that a deal has been struck between the online music application Lala and Apple. Although the specifics have not been released the deal has been speculated to be around $80 million. This purchase could mean big changes for Apple’s iTunes.

Lala is an online-based music application that allows users to “buy” streams of music for 10 cents a track or a dollar and album. Users are also able to purchase full MP3 tracks for 89 cents each. I love this service and currently use it daily. I’m anxious to see what Apple does with it and how it integrates this service into iTunes.

Apple has claimed that they are not really interested in the company behind Lala, but the people. They are buying the ideas and engineers behind the program. This means that they are interested in getting the experience Lala engineers have in streaming music distributed from a cloud. This could mean quite a few different features brought to Apple’s iTunes.

The first possibility is that Apple will directly port the Lala service to iTunes, allowing people to purchase the right to stream music for a cheap price instead of having to pay full price for other music formats. This seems unlikely to me as Lala’s business model doesn’t seem to be working currently and the other options seem to be more Apple friendly.

The next option is a subscription music service. Many of iTunes competitors already offer this already. Napster and Rhapsody allow you to have “all-you-can-eat” music for one low monthly price. They even allow you to download the music to portable mp3 players for listening on the go. Apple could leverage Lala’s streaming music service to bring a subscription streaming service to iTunes.

The final possibility I see Apple possibly considering is custom web radio. The current up and comer in the online music world is Pandora.

Pandora is probably one of my most used web applications. Pandora allows you to rate music you like and chooses new music for your online radio stations based on your ratings. I love Pandora, it does a great job, and it’s growing at a fantastic rate and I can’t imagine that Apple doesn’t want to get into this. Apple already has a recommendation engine with their music Genius, they could easily incorporate Lala’s streaming service to build their very own Genius radio to compete with Pandora.

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James Bathgate writes a monthly technology column for The Soap Boxers. His articles can be found in Reality Bytes.

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