updated 05:55 pm EDT, Tue October 26, 2010
Apple may snap up Spotify for music streaming
Apple may be in the very earliest phases of a possible buyout of Spotify, a rumor floated this evening claimed. The discussions were billed as so early that fixed prices and term sheets weren't ready, with involvement an "on-again, off-again" process. TechCrunch didn't learn about Apple's aims for the deal or other details.
Any deal would more likely follow the pattern behind the cloud-based iTunes feature that it may have been quietly testing with its recent special event streams. How it would work if it comes to fruition hasn't been settled, but it could range from as little as a web-based listening option to a full locker that holds a user's iTunes collection online. Labels have allegedly been resistant to letting users copy their music online, since they would consider it a second use that could incur a second fee.
The nearly finished North Carolina data center is rumored to be the cornerstone of any streaming that Apple offers and would be necessary to fuel the massive amounts of bandwidth and processing power necessary to serve millions of users with music, video or both all at the same time.
The acquisition could be an unintentional coup against Google. The same sources alleged that Google had become much more serious in its own negotiations, around when Apple acquired Lala, and was willing to pay as much as $1 billion before talks broke down. Google itself may have soured its hopes by pushing Spotify to negotiate a label deal transfer, although Spotify had also been pressing for an extremely high $800 million walk-away payment from Google if regulators or other problems forced a premature end to the deal.
Both Google and Spotify are suspected of having struggled without each other in the months since the deal's end. Google had teased the prospects of a music service as far back as its I/O conference in May, but leaks have revealed that it has failed to get deals and solidify plans for what would be an Android-oriented cloud music option. Spotify has repeatedly promised a launch in the US, but it has faced opposition not only from labels but possibly from Apple.