San Diego’s Michael Robertson, who founded several startups since he sold MP3.com in 1997, offered some observations about online music providers and other aspects of the digital music business when we talked in late November. Today he offers more insights in a post for TechCrunch that explains why Lala, the Palo Alto, CA, digital music startup acquired by Apple last month, is crucial to Steve Jobs’s emerging music-in-the cloud strategy.
Robertson told me he’s pessimistic about streaming music providers like Pandora and Slacker, saying their likelihood for survival is inversely related to how much venture funding they have raised. He said that’s because “selling music is like selling gravel; it’s a commodity” and they have no way of making money. (Slacker, based in San Diego, has raised close to $70 million.)
Robertson, who founded San Diego-based MP3tunes in 2005 to enable users to store their digital music collections in the cloud, views cloud-based storage as a much more viable business model.
And, as Greg reported earlier this month, Apple’s recent Lala acquisition raises fresh challenges for competitors like Seattle-based Melodeo, a cloud-based music startup. Now Melodeo is rushing to provide the next iteration of its own technology (which it announced last week) that will let people put their iTunes collection into their own “private cloud” that can be accessed from their smartphone or Web-connected device.
None of Apple’s cloud-based music plan comes as a surprise to competitors like Melodeo. Reached by e-mail this morning, Melodeo’s vice president of business development, Dave Dederer, said, “This is the product we already have working in private beta and are prepping for commercial launch this quarter… Ours has the advantage of breaking Apple’s product vertical/ stranglehold. We can build ours to work with Apple devices but we’ll be focusing on Android and the rest of the market first.”
(Xconomy Seattle Editor Greg Huang contributed to this post.)
