SAN FRANCISCO — With its deal this month to buy the Web music service Lala, Apple may be pointing the way to the future of music.

In this future, the digital music files on people’s computers could join vinyl records, cassette tapes and CDs in the dusty vault of fading music formats.

Instead, music fans will use their always-online computers and smartphones to visit a vast Internet jukebox, where Gregorian chants, Lady Gaga tracks and the several centuries of music in between are instantly available.

For a small but growing cadre of music lovers, the vision is not that outlandish. Josh Newman, a 30-year-old technology consultant from Toronto who travels widely, pays $16 a month for Spotify, a subscription music service that, for now, is officially available only in Europe. Spotify allows unlimited listening to its online music library.

Since Spotify introduced an application for the iPhone over the summer, Mr. Newman has begun listening to the service almost exclusively, even though he has 35,000 songs on hard drives at home.

“The irony is, I don’t even go back to that music,” Mr. Newman said. “I’m almost too lazy. If there’s an artist I want to check out, I’d rather listen to it on Spotify than have to dig through my collection.”

The idea of a limitless jukebox in the sky — or in tech-speak, “in the cloud” — has been around for some time, but it is consuming music executives who now associate the word “funk” with more than just a musical genre. The recording industry, which had $40 billion in annual sales a decade ago, is now bringing in half that. More ominously, the growth of revenue from digital downloads, still only a fifth of the total sales pie, is slowing

Read the full story here:

With Apple Purchase of Lala, Music Business Heads into the Virtual World – NYTimes.com.