Streaming iTunes Suffering From Licensing Woes?

Hot on the heels of the news that Google is dead-set on developing a serious music product there are fresh rumors on Apple’s musical future, streaming iTunes.

Ever since Apple purchased LaLa the technology world has been waiting for Apple to develop a browser-based alternative to the generally heavy desktop software tool that helped launch the digital music revolution. We have yet to get our hands on anything substantial.

That is not to say that Apple has not been hard at work on the idea. What few people do not know is that LaLa’s streaming deals with record labels had a very important clause: if the company was purchased, their licences did not transfer to the purchaser. When Apple did pick up LaLa they had to restart talks with the music industry lawyers that we all know and love.

From what we have heard, the talks are not going as well as Apple could have hoped. Electronista had this to say on the matter:

It [Apple] has talked with the top four labels but supposedly doesn’t have the deals it would need. The iPad producer could already stream from a user’s iTunes collection through the Internet without a license, CNET understands, but it would need to do more to stream directly from its own servers. Executives at the studios may not have even seen all the details yet, making it difficult for them to gauge the viability of the deal.

‘The viability of the deal’ — uh oh. Apple is already only an uneasy ally of the record companies; they appreciate the business that Apple brings them but they fear the industry power of iTunes. What they would love to see is a serious streaming competitor to iTunes, not a Apple-led musical hegemony.

Apple will get the deals if they want them enough, but the terms that they manage to extract may not be as favorable as they had hoped. How that will effect the pricing of Apple’s eventual product remains to be seen. For now, Apple has no deals, and has all their work still ahead of them.