Founder Forecast: Zero Chance of iTunes Subscription Service, Cloudy Music Ahead

Apple will not be offering a subscription service through iTunes, according to founder Michael Robertson. Instead, the company bought Lala in order to transform iTunes into a cloud computing service that will make a user's music library available anywhere and everywhere one can access an Internet connection. In a piece written for TechCrunch, Mr. Robertson laid out with great detail what he thinks Apple will do and how the company will do it.

Mr. Robertson was not the first person to lay out this vision for Apple's Lala purchase, but the plan he describes is the most detailed analysis we've seen, and it draws upon his own experiences in the online music industry. That experience includes having founded (and sold for US$372 million in 2001), as well as the current online locker service

The nuts and bolts of this idea is that Apple bought Lala in order to get the code base and engineers who had developed the online storage component of Lala's subscription service. That code base and the experienced engineers will allow Apple to move much faster than the company might otherwise be able to move.

As we have discussed before, Lala could scan a user's hard drive for music already owned by the user, match up that library to Lala's online catalog, and then give the user access to the music from any browser. Apple, according to Mr. Robertson, is going to transform iTunes into just that kind of cloud-based service, allowing customers to have the a maximumly-portable music library with no work on the user's side.

One of Mr. Robertson's key points is that Apple will not have to obtain (and pay for) new licenses from the music labels to offer this service because it's only music already owned by the user that would be made available in such a fashion.

"Record labels are wary to give Apple even greater dominance which is why Apple's new strategy is designed to sidestep new licenses from the major labels," he wrote. "Because users are in possession of the materials no new licenses are required from the record labels or publishers."

He argues that by transforming iTunes into a cloud-enabled service virtually overnight through a simple iTunes update, Apple will be able to maintain a lead over the competition in the online music business.

"[Apple CEO Steve Jobs] is keenly aware of the digital transition from PC to cloud centric programs and services," Mr. Robertson wrote. "It's imperative Apple lead in this transition or risk ceding leadership in media to others such as Amazon, Real, Microsoft, Yahoo, etc. Lala will help Apple protect their media franchise from encroachment by accelerating their cloud efforts."