As the dust settles on Apple’s acquisition of Lala  and MySpace’s acquisition of imeem and iLike it is clear that 2009 is shaping up as the year that the social music marketplace consolidated.  The trend was started back in 2007 when CBS snapped up Last.FM for $280 million (though you could make an argument that News Corp inadvertently kicked things off with its $580 million purchase of MySpace in 2005).

So the fact that there is a lot of money pouring into social music shows us this is a prosperous segment right?  Wrong.  Last.FM’s purchase price contrasts sharply with the reported $1 million that MySpace paid for imeem.  imeem was no small fry (it has approximately 30 million users in the US).  Instead imeem found itself straddled with the burden of insurmountable debts and a fundamental inability to make its business model work.  And therein lies the rub: social music may have audience momentum but the business model is currently broken.

All of which might make it appear strange that Apple and MySpace would want to invest in this space.  They are doing so because of two key reasons:

Earlier this year, I pointed out how Orange and operators were pursuing their innovation efforts in the context of new entrants (Apple, Google,...) shaking up the mobile value chain.

The recent announcements made at the 10th Orange collection are another proof of Orange's dynamism.If you have no clue what lifeisbetteron.com, wormee.com, radiomee.com, cityvox.com, or webcity.fr have in common, I strongly advise you to take a look at this document.

Another interesting announcement was made this morning at the LeWeb conference in Paris, where Orange officially announced the launch of its Application Shop (available in beta in the UK and France for several months). This shop will first be available to 1 million customers in these two countries before being roll-out to millions more customers throughout 2010. For now it gives acess to 5,000 applications.

Replicating Apple's success will not be an easy task and operators should not follow this route. They should on the contrary leverage their key assets to offer:

Frankly I am surprised that it took this long. But today, we read in the Wall Street Journal that two major publishers have decided to pull a music industry mistake. Simon and Schuster and Hachette Book Group have announced that they will not release most eBook editions until the hardbacks have been on shelves for four months.

And I quote David Young, CEO of Hachette Book Group, whom the article cites as saying: "We're doing this to preserve our industry, I can't sit back and watch years of building authors sold off at bargain-basement prices. It's about the future of the business."

Correction: This move is about the past of your business.

I'm just being a historian here when I point out that language like "We're doing this to preserve our industry" is a classic symptom of what we at Forrester loving call The Media Meltdown. I wrote a whole report on this ailment and its many symptoms, chief among them is that media businesses attempt to preserve analog business models in the digital economy, even when analog economics no longer apply. This is exactly that scenario.

I have two very important messages to offer the book industry (most all of them clients, so I'm trying to be delicate here, the way a group of friends running an intervention for an alcoholic have to act even if it involves summoning tough love). The first message is the hardest to hear and it will make me some enemies. But the second message offers some hope and I encourage you book types to give it a fair hearing, because I have history and economics on my side. 

We’ve just launched our most recent survey on Marketing Organizations.The goal of the survey is to understand how Marketing Leaders like you: