At a steep discount according to Peter Kafka at allthingsd.com  

Essentially fifty cents on the dollar.

WMG continues to be the worst investor on the block, already having written down $11 million of its $20 million dollar investment.

So what exactly is Apple buying?

Technology.

There’s the issue of being able to put a listener’s MP3/iTunes collection in the cloud for access elsewhere/on a mobile device and the ability to stream those songs almost instantly.

But didn’t Apple have this infrastructure already?

Seems not.

The same way the Cupertino company purchased SoundJam MP to get into the computer music world by tweaking it and releasing it as iTunes, it appears Apple is a step behind when it comes to streaming.

Then again, the price paid was a bargain.  Lala wanted to sell.  It saw no upside in the future, only the need to raise more money.

And Apple’s got a huge cash hoard.  So why not buy some code and engineers that will help you get to your destination…

So, it appears that Spotify is further down the line with streaming technology than Apple.  Whodathunk?

But when it comes to Apple, nobody knows anything, because Steve Jobs and his minions just don’t talk.

But it does appear that even Apple now believes streaming is the future and wants to have all the technology in its arsenal necessary to play.

__________________

Kafka now says a source indicates his numbers are "way off", but the "New York Times" states: " the negotiations originated when Lala executives concluded that their prospects for turning a profit in the short term were dim and initiated discussions with Eddy Cue, Apple’s vice president in charge of iTunes." And he who initiates the sale usually takes a hit on the price.

Apple Strikes Deal to Buy the Music Start-Up Lala

Confirmed: Apple Buys Music Service Lala, At a Fire Sale Price

My trusted source, with direct Apple access, tells me this:

"But Eddy Cue is way more interested in a couple of key men (developers) than the existing IP.
They’re not primariy buying tech this time."

From: David Wallace
Subject: Re: SuBo

i think the more interesting story is that Shakira only sold 89K first week.  ALL that hype – all the $$$ spent on marketing – the award show appearances – that TERRIBLE video – cover of Rolling Stone, etc. etc. – and it debuts at #15 with 89K sold.  What’s next week going to look like?  

Look at the Fifty Cent numbers – debuts with 160K (#5) – drops 60% second week to 65K (#20).  This guy has sold 16 Million records in THIS decade.  His last record debuted with 700K first week.  That was only two years ago.  He should have bet SuBo he would outsell her this week so that people would give a shit that he was releasing a record.

Give Susan Boyle credit.  She’s got fans.

Do Shakira and Curtis/Fifty Cent have any fans?

We’ve seen a breakdown of the edifice throughout this soon to end decade.  Not only have CD sales declined, but the way of promoting those albums has too.

People forget that when ‘N Sync sold two million records the first week out, MTV was still all powerful, still the tastemaker.  That’s just as important as Napster/theft.  Everybody was focused on the music television station. Now?

In 2000, most people were on dialup, if they were online at all.  There was no YouTube, no MySpace, Google was not a household word.  We were all positively old school.  In a hangover of the nineties.  When the market raged and there was money for all.  You spent willy-nilly, you felt like a winner, a world-beater.  Boy are those days through.

The record business’ clients were MTV, radio and retail, in that order.  MTV isn’t even about music anymore, radio is a shadow of its former self and it’s hard to even find the album you want in a physical format.  The indie stores have died and the big boxes keep lowering their number of SKUs.

Still, if you’re the Dave Matthews Band, you can move 424,000 copies of an album with no significant radio footprint the week it comes out.  Because Dave Matthews has fans.

Does Fifty Cent have any real fans?

He’s not a lovable guy.  And his tracks have dropped in quality.

A fan buys the new album without hearing it first.

A casual buyer waits to hear if there’s a hit.  THAT’S the paradigm that was established in the nineties.  It was about the track, not the act.  If you’ve got a hot cut, I’m interested.  If not, I’m not even paying attention, you’re not even on my radar screen.

So today’s key is to fight for fans, not spins, not media clippings.

Sure, spins still generate sales.  But usually only of the track itself, a low profit item.  And because the audience has scattered since the nineties, Top Forty, the true radio driver of significant sales, means less than ever before.  So, major labels play the old game to ever less success.  But even more fascinating is if there’s not a hit single, then the whole project is doomed.  How many Alicia Keys fans are there really?  Sure, we know who she is, Clive’s told us she’s his protege, but when her single doesn’t hit do you even risk putting out an album?

Mariah Carey has faltered.

Shakira…  David Wallace has it right.  She was everywhere.  And she’s not a hatable character.  But it turns out they only loved her singing about the veracity of hips.  She’s like Jennifer Aniston on "Friends".  Remove her from the sitcom and most people just don’t care.

The tabloids still care.  But they’re not about acting.  They’re purely about fame.  And although Paris Hilton and the Kardashian sisters have made fame without talent pay, traditionally that’s got a short shelf life, and it’s a bad way to play in the music business.  The music business is all about down the line, catalog sales, endless sold out arenas.  The music business is all about tomorrow, not today.  It shouldn’t be what have I done for you lately, but REMEMBER WHAT I DID FOR YOU ALL THOSE YEARS AGO!

All the classic rock acts are touring on this.  And there are a lot of them.

But people with one hit can play a club.  And when the hit fades, they can barely work at all.

So don’t bother hating Rihanna, Katy Perry, all those faces you see too much whose music seems irrelevant and evanescent.  They won’t be around for long.  Just like Miley and Jonas and…

Taylor Swift?

She’s selling something different.  It IS about the music.  You’ve got to start there.

Then you have to bond your audience to you.  It doesn’t have to be everyone, just enough to make a living. And hopefully, the crowd is still growing.

You see there’s no consensus anymore.  In anything.  Have we ever been more divided politically?  Have we ever had more niches of entertainment, that each individual could burrow deeper into to his heart’s delight, connecting with like-minded people and not worrying about the masses?

The major label game, as played for the past two decades, is dying of its own accord.  It’s got nothing to do with theft.  It’s got to do with the splintering of the marketplace.  Now you’ve got to come up with something great, that’s lasting, and convince a hard core of fans that you’re real.  You need a steady stream of product to keep them engaged.  The megatour every three years is less important than just showing up on a regular basis, sans production, everywhere those interested live.

Bottom line?

This is good for music.

Dave Matthews Band’s fans believe the new album is good.  Doesn’t matter what you think.

U2 fans believe the new album sucks.  And since word can get out so easily today, it stalls in the marketplace.

So, your music must be considered good.  By the target audience!  Then you need to focus on growing that audience by motivating those presently interested, not trying to convert blocks of people who don’t care by flogging them again and again in old media.

Yes, old media is a huge fan of Shakira.  She’s cute, she’s sexy, she’s smart.

But what does that have to do with music?

To have a lasting music career, you’ve got to put the music first.

I don’t have the time.

And neither do you.

That’s what your unwanted e-mails are, solicitations.

According to the Oxford Dictionary:

"solicit: ask for or try to obtain (something) from someone"

Yes, you want something from me.  Believe me, you wouldn’t be e-mailing me if I didn’t have an audience.  You want me to write about your project/service/artist so that you can be more successful.  What’s in it for me?  Good question!

I’m willing to admit your product could be fantastic.  But I just don’t have enough time to filter through the junk.  And I have great suspicion for someone who’s promoting with self-interest.  That’s why I beat up Ian Rogers’ tweets today.  I love Ian on a one-to-one basis, that’s one of the reasons I follow him on Twitter.  But he’s trying to build a business, and he’s employing Twitter to do this.  To the point where he’s lost all credibility when it comes to music.  Because he won’t say something’s bad.  Won’t delineate when a project is a Topspin one or not.

In other words, if you’re selling, I’m not buying.

That’s the consumer revolt against advertising.

If I want a new car, a new pair of skis, a new computer, I’ll pore over websites for hours.  I want this information.  I can consume it at my leisure, without being bombarded.  If you ask me for my e-mail address, I won’t give it or will give you a false one. Because I don’t want more input.  I’ve got too much already!

I just opened my cable bill.  $187.  And I turn on my TV a few times a month!  It’s there for when I hear about something, I’m then able to check it out/record it.  As for mindlessly surfing from channel to channel…why would I do this?  There’s enough on demand to satiate two lifetimes.  I don’t want to waste time separating the wheat from the chaff.  I want someone else to do that for me.

Those movie preview issues in "Entertainment Weekly", even the "New York Times"?  I don’t read them.  I wait to hear from trusted sources whether the film is good or not.  Why waste time with hype?

I look at what records are being reviewed in mainstream publications, but only to see who broke through the filter, who got ink, because when it comes to music, there’s not a single newspaper I trust.

But I trust Mike Marrone.

He e-mailed me about a Too Much Joy track.  I checked it out on Rhapsody.

I’ve got Rhapsody, Napster and Spotify along with the free services at Lala, MySpace, YouTube, artists’ websites and RapidShare.  I’m not lacking for music, I’m more interested in knowing what to play!

This is so different from the days of yore.  When I had limited cash and played the albums I bought to death.  I had to, there were no other sources of music, other than radio, which although good, I didn’t control.  Now, I hear about great tracks from a million artists.  Who’s got time to listen to a seventy minute CD?  It’s going to have to be really fucking good.  Every single track has to rivet me in order for me to keep listening.  You’ve got to bat 1000, or I’ve moved on.

And so has everybody else.  That’s the iTunes cherry-picking mentality.

You may not like it, but it’s real.

I’ve got trusted sources.  I depend on those.  TV advertising escapes me, I wait for multiple friends to say something is great before I check it out.  Like "Modern Family".  People with no vested interest e-mailed me saying it was great.  Still, I’ve only watched a few minutes.

How do you penetrate the force field?

By creating something great.  Not good, great.  We no longer have time for good.

And then you seed it with your trusted sources.  Your friends, your relatives.  And, if it’s truly great, they’ll turn on someone not related to you, with no vested interest, who might ultimately even reach me.

In other words, if you’re selling it, I’m not interested.

They say GM cars are great, just look at the advertising!

But "Consumer Reports" says they suck.  There was a report just yesterday that they’ve got shitty resale value.  I’m not interested in the sheen, but the substance.

CR is my go-to guide for automobile reliability.  I may not trust them with car greatness, but they’ll tell me if cars last.

Greatness?  I’ll go with "Automobile".

So, to reach me, you’ve got to start off by earning my trust.

Maybe I don’t know you, but I know your lawyer and like him.

Maybe we shared a car ride once and I liked the music you played on your iPod.

But just because you’ve e-mailed me twenty times with good information on tech doesn’t mean I trust your music recommendations.

We’re looking for filters.  In a world of 500 TV channels and endless websites we want trusted sources to tell us what’s good, to make sense of things.  And that’s who is going to make all the money in the future.

That’s the Google secret.  Prior to Google, you rarely got what you were looking for via a search engine.  You had to tweak the search terms, use quotation marks.  I thought Google was a joke, a search engine for newbies until I just heard too much about it and tried it. Now I’m sold.  I don’t need Bing.  And that’s Microsoft’s problem.  A new search engine would have to be a quantum leap beyond Google to interest me.  I’ve got my search problem solved.

I don’t have a definitive new music filter.  Satellite radio used to be it, but then they switched sides, to the purveyors, to the advertisers, to the consultants, anywhere but the listener.

The blogs have too much self-interest.  They love everything in a genre or are about hating everything that’s not in that genre.  I can like alt.country and a great pop song.  But where’s the blog that tells me honestly about both?

And it’s about taste.  Which is different from raw data.

So, you’re frustrated, you can’t break through.

I hate to burst your bubble, but all those people you hate, at the top of the pyramid, they didn’t get there easily.  They got a million doors shut in their face.  They wasted a ton of time.  But were tenacious and made it.  And since they might have never ever gotten a great unsolicited recording, they’re playing the odds, they’re waiting to hear about you from someone they trust.

Use the intermediaries.  Know it’s about credibility.  And decide whether you want to play in the old world or the new.  Who gives a shit if Jimmy Iovine pays attention if you don’t want to be on a major label?  Who gives a shit if I miss how great you are if you build your own audience?

Face up to reality.  Don’t be sour grapes.

The post I e-mail most is this:

Permission Marketing

That’s Seth Godin on permission marketing.

Read it and weep.  Because it tells you all those nineties marketing tricks are history.  You’ve got to earn your audience.  By gaining their trust, by not abusing them, by giving them something they’re interested in.

The reason I e-mail this post most is because every single day I receive multiple unsolicited e-mails.  Worse, it’s oftentimes people putting me on their mailing lists.  Forcing me to hit "unsubscribe" to get off.  Even worse, most lists don’t include an unsubscribe button.  You e-mail the perpetrator again and again, but you still get the e-mail.

Then there are the PR people, sending me over the top praise for crap.  Like I care about what you’re getting paid to promote? YOU’RE getting paid, not ME!

It’s much harder now.  But the dividends are far greater.  If you play by the new rules.

So please read the above-referenced post.  And think twice before hitting send.

But I’m not writing this to tell you about permission marketing.  I want to tell you about Seth’s new book promotion.

That’s how Seth Godin makes his money, selling books.  And doing live appearances driven by his online fame and the success of said books.  He does no consulting, he gives his information online away for free, taking no ads in the process.

But how do you promote a book today?

You could spam everybody in your address book.

Like that’s gonna work.

Or you could buy a mailing list.

All the traditional efforts are like the person who insists on giving you their unsolicited CD.  It doesn’t work.  It makes the perpetrator feel good, that he’s done something, but if you think the execs you lay them on are going to listen to them, you’ve got another thing coming.  Furthermore, it’s easier to listen online.  But that doesn’t make you feel as good.

Furthermore, the old promotion paradigm is broken.  There are fewer traditional media outlets with less time and space for books (and music!)

So, you’ve got to motivate your core audience.

By delivering something they want.

And it’s even better if the average person can’t get it.

How about the band sending x number of followers the new tracks BEFORE they’re released!  That’s how you create buzz.  Not by going on the "Today Show" after polishing your track with Timbaland to crap.  Can you imagine how special all those people will feel?  They’ll tell everybody they know about your music.

But Seth sells books.  You can download a book, but it’s not as special as the real deal.  And people feel better when they get something they perceive as having value.  (I know, I know, you’re questioning why I don’t want to get your CD, as stated above. The difference is I DON’T WANT YOUR CD!  This only works if someone WANTS what you’ve got.  Then, to have something tangible adds value.)

But books cost money.  To print.  And to sell.

But every project has a marketing budget.  Maybe instead of spending it on old media, you should go to your true fans, who can spread the word a la Malcolm Gladwell’s "Tipping Point".

But if you’re a star, and Seth is one in the world of business books, you can’t send a tome to everyone.  How do you separate the wheat from the chaff?

This is where Seth reveals his genius idea.

And make no mistake, it’s always about the idea.  Which can come in a flash.  Via one individual.  Whether it be Keith Richards waking up with a riff in his head and then recording the legendary line from "Satisfaction" into a portable recorder or Steve Jobs deciding to make…

And Jobs is a good example.  Because he doesn’t add more team to get to the end.  He just selects the right people and focuses and drives them.  It’s not about quantity, but quality.

But you knew that.

So, how did Seth Godin achieve his goal?

By requiring you to donate to charity to get a book!

Voila, isn’t that simple and fascinating?  Isn’t that pure genius?

To get an advance copy of the book (three weeks before the general public can buy it), you’ve just got to make a minimum $30 donation to the Acumen Fund.  You can do the research, but it’s a great cause.  And all the money minus PayPal’s 2% fee goes to Acumen.  And only the first 3,000 people who donate can get the book.

So, how does this translate to the music business?

KISS should have given a copy of their new opus to the first 5,000 people who donated to a charity.  Maybe just digital files, you know the KISS Army wants it.

But Gene is so interested in putting dollars in his own wallet, he can’t see the glory of charity, how it makes people feel good to donate, makes them feel good if you donate too.

For big bands with bad images, this is a no-brainer.

And for less significant acts, it’s a way to bond fans to you.

You accomplish your mission.  Getting your product in the hands of those who can best promote it.  And you don’t look greedy, but philanthropic in the process.

This is twenty first century promotion.

Let’s see who does it in the music industry first.

But don’t cock it up!  It’s got to be simple, sans hype (i.e. you don’t put out a press release, you just post a simple notice on a Website, like Radiohead did with "In Rainbows") and transparent.  This is how U2 should have released "Get On Your Boots".  It could even be how they could break a new track.

Talk amongst yourselves.

Original Seth Godin blog post

All the details