Summary: It doesn't exist.

Two days ago, Apple purchased popular music streaming sight LaLa (it's a rule these days that any technology that aims to be popular must have a name close to the sound a baby makes throwing up on itself). Socialmediatards fell into a frenzy that this meant that Apple was going to launch a free streaming version of iTunes. Now there are indications that this isn't even close to the truth. Apple is a notoriously secretive company, but it appears they purchased LaLa for the right to employ a couple of their engineers. They've done this many times before, either to secure access to a certain component or simply to expand their devious little hive mind for a product launching way, way down the road.

Lala was only the latest music streaming company to get swallowed up by a gigantic corporation. Back in August, MySpace (owned by Rupert Murdoch, not "Tom") purchased iLike. And just yesterday, MySpace consummated its black widow ingestion of iMeem.

These were more or less the cream of the crop as far as music streaming sites went. Pandora, Spotify and a few others are still out there, but as they say in the newspaper business: two incidents is a coincidence, three makes a trend. And the trend here should freak everyone the fuck out.

Do you know what Apple paid for LaLa? Rumor has it, about $17 million dollars. Sounds like a lot of money until you realize that LaLa had about $14 million in cash in the bank, which makes the actual price around $3 million.

That's all that's left from the estimated $35 million Lala received from investors (including Warner Music). And that gives LaLa a return on investment of -50%, which makes the real estate industry look damn lucrative right about now.

Back in August, iLike was sold to MySpace for $20 million. And iMeem - probably the most popular of all streaming sites - was picked up for somewhere around $1 million.

These sites have millions of users between them. Why are these services going so cheap?

Because they're losing money, and a lot of it.

LaLa was in the red about half a million bucks a month, meaning they could float for maybe a little more than a year before going broke. iMeem nearly went out of business over the summer because it was (and presumably still is) drastically far behind on its payments to music industry labels for licensing their fees. The price here might very well just be a deal to cover iMeem's outstanding debt.

This is another dirty little secret of the "Music 2.0" that web gurus at conferences and workshops and seminars like to shove down your throat. Nobody is making money at it. Streaming is all great but it's just another promotional tool, not a goldmine. And there are quite enough promotional tools already that don't make any money.

The reason why nobody talks about this - or rarely does, anyway - is that most of the writing about these companies is from tech-oriented sites and publications. They're writing from the perspective of users, not musicians (and certainly not as investors). They love a service and declare it a success - and it is, as far as pleasing many people goes.

Walking around and stuffing envelopes full of money into the hands of strangers is successful as well, but, like music streaming sites, is not really a growth industry.

This profound disconnection between users on the one hand and content producers and investors on the other has led to some surreal episodes in the wake of the new ownership of these sites taking over. There was a bit of an uproar when the first thing MySpace did after taking over iMeem today was to shut off access to iMeem's API, which developers can use to spray a site's content around like a firehose.

Developers immediately freaked the fuck out - many had built websites around those APIs (presumably with as solid a business plan as iMeem had in the first place, which is to say none at all.)

Lee Martin, developer of twt.fm (a "mash up" of iMeem and Twitter, presumably pronounced TWATFOOM!) cried foul as his service built upon iMeem's API went dark:

In truth, Rupert Murdoch is sick of MySpace losing money. Every day, every user is costing iMeem money. Rupert's hand-picked minions at MySpace undoubtedly read the writing on the wall and put a stop to bleeding bales of money for neat little hacks that nearly led iMeem to shut down before Rupert picked up the company for a song.

Martin is right, though: iMeem truly was the music business of the future. No future.