Monday, January 4, 2010

Will our listeners go GaGa for LaLa?

Apple's recently announced acquisition of LaLa didn't seem to prompt much radio industry discussion (though Mark Ramsey and Jerry Del Colliano both wrote about it). And frankly, I didn't think much about it until our Media Services Group online/new media guru Stephan Sloan explained to me the potential fallout on the radio operators. Turns out, it is a REALLY big deal to broadcasters. As Mark Ramsey put it, "And what do you call your favorite songs that you don't own but you have permanent access to? You call it 'radio,' folks. Except in radio's case it's the advertiser paying the 10 cents."

LaLa is a "pay" service where customers pay a dime to be able to permanently stream a song wherever and whenever they want. The company's growth was held back a a little known startup. Who wants their music library investment tied to a little known, probably under-funded start-up? But Apple is a different story. I'd trust them with my music and you probably would too.

Apple's iTunes arguably already controls the music business. They have the content. And with their myriad of cool appliances (iPhones, Nanos, iPods, Macs, etc.), they have the distribution platform. Plus, the technology provides a cache of the tunes . . . you can still listen when you're away from the Internet.

There is an appealing "anytime/anywhere" component to Apple/LaLa (sound familiar?). And this puts Apple into the streaming business, big time. Short term, that might bode well for our streaming businesses. Long term, different story.

Apple innovates. Consumers know it. And we (the broadcasters) have been a little short on innovation lately. It will be tough to "out music" Apple. They have a coolness cachet that we can't match, especially with their appliances. By the way, have you bought a radio lately? Drop by Target or WalMart and see what you think of your choices. But, I digress.

LaLa is developing an iPhone app. A subscription service is probably just around the corner. Pandora and XM/Sirius are likely the most immediate casualties, but we might be next.

So why didn't a broadcaster buy LaLa? Maybe because none of us have any cash at the moment. But even if we did, would we, as (mostly) a bunch of 50+ (mostly) guys, have had the vision?

How do we compete? We can't beat them with just music offerings on our interactive platforms. We have to provide more. We have to "go where they ain't." And I suspect that talented local personalities are part of that solution. Think "entertainment."

Those are my thoughts. What are yours? Your comments are encouraged (click "Comments" below).

Media Services Group


  1. Very interesting to pose the question as to why a broadcast company wouldn't have jumped on LaLa. Juxtapose that question atop your very relevant point about Apple's "coolness cachet" and a scary reality emerges. That cachet can very quickly ratchet up a platform like LaLa. But what would the results be with the EXACT SAME platform being pushed by, say, Clear Channel? A company with an extremely low, if non-existent, "coolness cachet"! At this moment in time is there a big radio company with enough of that cachet anywhere? Kinda some troubling thoughts...

  2. George,

    Great entertainment ... preferably local, will help sustain radio. The move by some toward making stations jukeboxes is not a long-term solution.

  3. Steve, these days "cool" and "radio" are seldom used in the same sentence. And you're correct, that is a very troubling notion. Hopefully our industry leadership will begin addressing that problem in the New Year (hope spring enternal!).

    Joel, clearly juke boxes are not the answer. I do believe that there is a trend back toward live and local. Let's hope.

  4. How difficult is it to start a radio station in a small town? We have one main station. The owner carries Rush Limbaugh & other unenlightened programming. The isolated, ignorant people in town think the Russians, Chinese, North Koreans, and Arabs are going to attack any day now. Thanks, radio station owner.