Hammacher Homepage 300x250“Reports that Apple has purchased streaming music startup Lala is bad news for companies in the crowded streaming music sector,” Tom Foremski writes for SIlicon Valley Watcher.

“By acquiring Lala, Apple is signaling that it intends to be a major player in the fast growing streaming music sector,” Foremski writes. “It also shows that Apple is betting on a unique approach towards streaming music services and one that better fits into its current iTunes business model.”

Foremski writes, “Lala offers customers a lifetime license to stream songs from its extensive music library for 10 cents per song. This is a complimentary model to Apple’s iTunes store that offers downloads of songs for 99 cents each.”

“In the US there are numerous startups offering advertising supported music streaming services. Advertising supported music streaming, however, faces challenges as license fees rise,” Foremski writes. “With a paid-model such as that offered by Lala, Apple will be able to offer better licensing deals to the hard hit music industry than revenues from competitors with advertising supported music streaming services. This will be a key differentiator in the forthcoming battles over subscribers to music streaming services.”

Foremski write, “Unlike music subscription plans where access to music stops when payment stops, Lala users retain full access. Why waste $15 per month on a subscription plan when for the same money you can have lifetime access to 150 songs a month, and build a growing library of music? Again, Apple has a key differentiator that competitors lack.”

Full article here.

[Thanks to MacDailyNews Reader “James W.” for the heads up.]