Warner given $9 million as part of Lala buyout
updated 11:25 am EST, Tue January 12, 2010
Return helps compensate for earlier investment
Warner Music was paid $9 million under the terms of the Apple buyout of Lala, SEC documents reveal. Lala specializes in streaming music over the web, and before the Apple deal received some $35 million in funding, including $20 million from Warner. The record label wrote down $11 million of its investment in 2009.
The $9 million payout will help to compensate for some of the loss, but Warner is also said to have had warrants worth $4 million if Lala had helped to sell 25 million CDs between 2007 and 2012.
The exact worth of Apple's deal for Lala remains uncertain. Some sources have put the number as high as $80 million, while others have said it could be as low as $17 million, or just $3 million after factoring in Lala's cash reserves. At one point in 2008 the company was estimated to be worth $180 million.
Apple has not made public its reasons for buying Lala, but given the nature of the latter it is generally assumed that Apple will be adding a web streaming service to the iTunes Store. Visitors to iTunes Preview pages can already access web-based track samples.
