Last Update: August 30, 2010
Overview
Hold on to your jockstraps. A rocket is lifting off. Apple is fixing to—once again—change the face of the music business. Apple bought a music streaming service named "La La" that never managed to make money charging $0.10 per download (duh—since you can own songs for free (and easily) as we have documented from one end of this website to another).
Then Apple closed it down!
Then Apple announced they were building a huge $1 billion server farm in North Carolina.
WTF? A lot of befuddled folks in the digital businesses and the music business assumed/assume that Apple's gonna get into monthly subscription-based streaming. Wrongo. Read on to find out what they are really doing.
The Apple Intellectual Property Cloud ("AIPC")
Apple's new "Cloud" will be used to serve up tunes, movies, books, TV shows, etc via technology acquired as part of the Lala acquisition. An in-depth and well-researched Washington Post article lays it all out.
Streaming music is a business model that's never worked. Apple knew it wouldn't a long time ago. Here's what Steve Jobs said about it years ago in a Rolling Stone article:
These [music subscription] services that are out there now are going to fail. Music Net's gonna fail, Press Play's gonna fail. Here's why: People don't want to buy their music as a subscription. They bought 45's; then they bought LP's; then they bought cassettes; then they bought 8-tracks; then they bought CD's. They're going to want to buy downloads. People want to own their music. You don't want to rent your music ? and then, one day, if you stop paying, all your music goes away1.
So, is Apple gonna stream content? Well yes—and no. Roughly the way this thing is going to work is that at some point in the near future (say 12 to 18 months or so), Apple will ask you if you want to permit them to save your content in it's Cloud. When you say yes, they will in essence create a digital locker for you "containing" everything you have bought from them.
In fact, that locker is going to simply contain digital pointers to the actual files that they will of course only store once in the Cloud. (Clearly it's not necessary to keep a copy in each person's individual locker.)
Then, when you want to play a song or watch a movie and you don't happen to have your iPod, or iPhone, of iPad, or laptop, etc on you or with you, you just can stream your content from the Apple Cloud.
What should hit you like a hammer is that this is only one step away from another Apple paradigm shift—why the download in the first place!!!
When you buy a song or movie or book from Apple sometime in the future, what you are actually going to "buy" is a license to listen to and/or watch or read the works you have bought on any device you want to FOR LIFE. It's all going to happen as 3G and 4G become 5G and 6G. As wireless speeds ramp up, why own an iPod with a 120 gigabyte hard drive? Apple will just maintain the files for you on their hard drives.
What This Means For Us
Can you hear the trumpets playing? Hallelujah!! Once downloads are a thing of the past and all of the intellectual property is under Apple's lock and key (and the competitors copying its business model), internet piracy will be on a downslope to oblivion.
Note: We don't say it's going to stop immediatly, because another piece of the puzzle has to fall into place and that is interdiction of the file sharing of the millions of songs and other works floating around the internet. More on that later.
