AT&T, the exclusive U.S. wireless carrier for the iPhone, is doing away with its unlimited Internet offering for new customers next week. Is it the end as we know it for streaming music services like Pandora?

Not likely, but AT&T customers might want to think twice about watching a ton of music videos on YouTube.

Current AT&T smartphone customers can hang on to their current $30-per-month plans or switch to a new option -- $15 for 200 megabytes or $25 for 2 gigabytes.

If you're hoping to treat yourself to an extra Arby's combo meal next month, the 2-gig plan should cover general usage. AT&T says it will cover 98% of its customers.

With an imminent update to Apple's mobile operating system, iPhone users will finally be able to listen to streaming music while they surf the Web, check e-mail and use other applications. So usage of Pandora is expected to skyrocket.

Music industry influencer Bob Lefsetz wrote in his newsletter on Wednesday that Pandora could become an unintended causality of the AT&T caps.

A Pandora spokeswoman said half a percent of listeners, based on current patterns, will be affected. If anything, Pandora presumes the cheaper plans could make smartphones, and in turn Internet-dependent music services, more accessible to the casual consumer.

Attention this week has turned to the pricing of music at online retailers, with indications that the Department of Justice has begun looking into promotional strategies by Apple Inc. and Amazon.com Inc. Any probes are said to be in the "preliminary" stages, according to those familiar with the department's questioning, but are focused on whether Apple leaned on labels not to participate in Amazon's $3.99 "daily deal" promotions.

The Justice Department's deputy director of public affairs, Gina Talamona, declined to comment on the matter, neither confirming nor denying the inquest. Representatives from Apple and Amazon had earlier declined to comment to The Times. Yet all four music labels -- EMI Music, Sony Music Entertainment, Universal Music Group and Warner Music Group -- were contacted by Justice Department officials several weeks ago, sources told The Times' Alex Pham.

Amazon's low-priced fire sales are nothing new, as the digital retailer has tried to gain traction on Apple's iTunes store, the world's largest music retailer. U2's "No Line on the Horizon," for instance, was discounted to $3.99 during its first week of release, and Grizzly Bear's "Veckatimest" posted high digital sales numbers after being given the nice price of $3.99 in its first week, with 13,000 of its first-week sales of 33,000 coming from the digital marketplace .

Four months after buying Lala Media's popular online music service for a reported $80 million, Apple is pulling the plug on the site, which had been operating for five years.

Lala notifed its users in an e-mail Friday morning of the shutdown. Apple spokesman Jason Roth confirmed the plans, but declined to say whether the Cupertino, Calif., company will resurrect the service under Apple's iTunes brand.

Lala lets users listen to any song in its catalog in its entirety once for free. After which, listeners can sample the song again for 30 seconds or buy a digital download of the song for 89 cents. What separated Lala from other music services, however, was its concept of a "Web song." Listeners could play a song an unlimited number of times for 10 cents, as long as they are connected to the site. 

The difference: Downloaded songs are stored on a user's computer and can be copied to other computers and devices. Web song files sit on Lala's computers and can only be played while the listener is connected to the Lala site. This is sometimes called "cloud" access.

There has been much speculation about whether Apple would use Lala's technology to create its own music streaming subscription service to compete with Rhapsody or MOG, which charge monthly fees for on-demand access to their extensive song catalogs. Another possibility is that Apple could use Lala's cloud approach to let customers who purchase a song from iTunes also have online access to that song in a sort of pay-once-play-anywhere idea.

While cloud computing offers convenience, the downside is clear in the case of Lala. Many users who have spent years diligently building their "digital lockers" on Lala woke up to find that those collections will evaporate on May 31.

Lala said it will compensate users, telling them "you will receive a credit in the amount of your Lala web song purchases for use on Apple's iTunes Store. If you purchased and downloaded mp3 songs from Lala, those songs will continue to play as part of your local music library. Remaining wallet balances and unredeemed gift cards will be converted to iTunes Store credit (or can be refunded upon request)."

Cue the swan song.

-- Alex Pham

Follow my random thoughts on games, gear and technology on Twitter @AlexPham.

Spotify, the Swedish music streaming software that's rocking Europe, has huge ambitions. Though still limited to six countries and yet to launch in the U.S., Spotify founder Daniel Ek is setting his sights on America's top music retailer and digital jukebox -- Apple's iTunes.

During a Q&A at the one-day New Music Seminar industry conference at the Henry Fonda Theater on Tuesday, Ek drew frequent comparisons to iTunes, and dropped in a few criticisms as well.

"We want to be the platform where you organize your music," Ek said at the event. "This is the cloud that everyone is talking about."

The "cloud" describes the Internet streaming model that exchanges ownership with convenience. Hulu is the Web's cloud equivalent for TV.

Most Spotify users choose to listen to and organize the software's 8 million tracks into playlists, and Spotify allows them to do it for free. Like iTunes, simplicity is at the top of developers' minds.

In order to cheaply download tracks, cache songs for offline consumption and access music from cellphones, 250,000 people -- mostly in Scandinavia and the U.K. -- are paying 10 euros or 10 pounds per month (that's $13.97 and $15.98, respectively). Other perks include removal of periodic banner and audio ads.

Rather than target what Ek calls "niche services" like Rhapsody and Napster, which charge all users a monthly fee, Spotify seems to be gunning for the big Apple.

With the release of Ustream Broadcaster for the iPhone today, it's pretty safe to assume that live video is about to become a lot more ubiquitous.

After signing up for a Ustream account, users can hit the "go live" button and start streaming video from the iPhone's camera to their Ustream website profiles. The app is available as a free download and even runs on older iPhones that don't have built-in video recording features.

If you look around at what's in the hands of many folks on most nights at the Palladium or the Henry Fonda, you'll probably see quite a few iPhones. That's how L.A. rolls. Once the overhead lights dim and the stage starts rocking, countless fans scramble for their phones to snap photos or record video.

A lot of those clips show up on YouTube the next day (and some, that night), but the device-to-Web delay is about to shrink -- from hours to seconds.

Ustream Broadcaster has been available on Google's Android phones for some time, but today is when the iPhone and its massively greater number of devotees can have at it. Before, you might have found the occasional concert on weekend nights, ready to watch. Now that it's on the iPhone, you'll probably be able to watch a show from practically every angle facing the stage.

Today's release of Ustream Broadcaster is unfortunately timed for the music industry. On Tuesday night, the major labels, in a partnership with Google, launched Vevo, a YouTube for music videos. U2 frontman Bono called it "the birth of a new model for our industry." A new model that apparently hasn't accounted for live concerts.

But what does Bono care? YouTube already has him covered with streaming -- the Rose Bowl event was one of the most-trafficked streams ever. Maybe streaming is something Vevo has planned (you know, after it fixes the problems it already has), but the Ustream app gives them a reason to get moving.

Here's some homework for you Thursday night: Search Ustream for Metallica or Morrissey. Even if you didn't get tickets, you won't have to miss a beat.

-- Mark Milian
twitter.com/markmilian

Image credit: Ustream

A tidal wave is washing over Europe, and it has already begun to transform the digital music landscape overseas. In the next few months, the company expects to make its way to the U.S.

Spotify is a program similar to iTunes that lets users listen to just about any song on demand. For free. The application takes a page from the Google model -- give a fantastic product away and plan to make money from ads.

It also has a "freemium" component -- that is a business model where the cow and milk are free, but the bells and hormones cost extra.

In order to play music on smart phones (including a spiffy iPhone app) or store songs to be played without an Internet connection, users must subscribe to Spotify Premium, a 10-euro-per-month plan. Each subscriber can sync three devices with up to 3,333 songs.

But Spotify has said in prior interviews that it expects the majority of users to stick with the free version. For that reason, U.S. record labels are skeptical, according to a recent story in the Financial Times. Subscription services such as Napster and Rhapsody have failed to attract significant followings.

The Financial Times also claims that Spotify delayed its launch in America due to roadblocks in talks with the labels here. Spotify spokesman Andres Sehr maintains that it's still on track to make its way stateside early next year, as the Swedish company has told Pop & Hiss for weeks.

Because "the U.S. is the largest music market in the world," Sehr said, "it's a long process."

Compared with the back-and-forth with European labels when Spotify was just starting out, this is nothing. "We negotiated with the record labels for two years before we launched," Sehr said.

"We've shown that we're really popular," Sehr said in a phone interview from Stockholm. "There's data, and we see how things work."

"Really popular" might be an understatement. According to firsthand accounts from folks across the pond, Spotify is practically ubiquitous in some circles. Barely a year old, the service hit the ground running in the half-dozen countries it operates in.

We've been testing the software for about three weeks. It blows the doors off of anything on the market and poses a major threat to several music services fighting for attention.

As countless bands release iPhone applications offering little more than a mobile version of their websites, electronic musician BT has a bigger goal. He wants to turn his phone into an instrument.

BT, along with a small team of developers at his company, Sonik Architects, built Sonifi, an iPhone app that lets users very easily manipulate songs on the fly.

Brian Transeau, best known by his stage name BT, scored the soundtracks to "The Fast and the Furious," "Zoolander" and "Go," in addition to gaining a significant underground following for his solo releases. His pioneering stutter sound effect influenced the trance genre.

A standard pop group's iPhone app offers little more than a band site, with music streaming, tour schedules, news and photos. MySpace's iLike built an entire business around it.

So, there's something to be said about a musician with a truly original utility. T-Pain has his Auto-Tune toy; Nine Inch Nails has its location-based Twitter app; and now, BT has Sonifi.

The app, available at the iTunes App Store, comes with just one song -- a dance track. But you can spend hours playing with it.

After Google ramped-up its music search-and-play capabilities, Apple has now quietly opened up its music store today with the launch of  iTunes Preview.

The iTunes outlet has one of the biggest record collections of any store, real or digital, but you wouldn't know it if you weren't on a computer that didn't have the software installed.

The preview feature lets users browse the music catalog by genre and artist. Albums are ranked by sales, as they are in the iTunes program, and pages contain track listings, pricing, reviews, biographies and other info.

Yet in order to listen to 30-second song previews or buy tracks, you still need to fire up the iTunes application.

But this finally provides an accessible way to browse for music to buy -- just in time for the holidays -- while at work or at the library, where administrators often frown upon installing third-party software like iTunes.

You can search for music using Apple.com's sitewide search engine. But strangely, iTunes Preview is having trouble executing searches from its pages. It's a new product, so we'll excuse the bugs.

Search, we suspect, is a big reason Apple rolled out the feature. As Google partners with music sites like Lala, Pandora, Rhapsody, MySpace and Imeem for its Discover Music  search feature, Apple perhaps doesn't want to be left out.

Contrary to rumors leading up to the Apple news conference this morning, we didn't get a touch-screen tablet computer or the Beatles on iTunes or a new Apple TV. But we did get Steve Jobs, who introduced cheaper iPods and a slew of improvements to the Nano, including a video camera and FM radio.

And, as Jobs promised, the new version of iTunes is available for download. This update to the most popular media player software brings a slew of small tweaks and big features.

You'll notice some of them immediately when you boot up the jukebox, but others are under the hood. So, we broke down some of the most notable changes.

You will need this guide: Apple attempts to alleviate the transition to the new application with an introductory video that launches the first time you open iTunes 9. It's pretty informative -- if you can get it to download.

Perhaps due to an influx of new users following the announcement, the tutorials took more than 20 minutes to load. Before that, we waited a few minutes for the new version to prep our music library. If you're impatient, start the install process now and keep reading this guide.

New look: ITunes' software design has traditionally been ahead of the rest of Apple's software. This new version introduces a number of noticeable visual tweaks in addition to a completely redesigned store. Apple has also given more options to the browser view, which lets you more easily sort through artists and albums. The new look is getting some mixed first reactions on Twitter.

Share on Twitter and Facebook: Speaking of Twitter, Apple is finally embracing social media, albeit in a pretty small way. The iTunes Store now has buttons to easily send messages on Facebook and Twitter about your favorite songs and videos. Baby steps.

ITunes LP adds goodies to album purchases: Thanks to chatty music execs, news of iTunes LP, formally called Cocktail, leaked long before the conference. But the store's new section of media-rich albums is definitely worth checking out. With versions containing digital booklets and ...

When the largest U.S. music retailer has an imminent news conference, people will speculate.

Here's what we know for sure: Apple's announcements Sept. 9 are music-related. The invitation the company sent to journalists (pictured at the top) shows a familiar silhouette of a woman dancing, iPod in hand, as we've seen in countless TV commercials.

Here's what others think they know: plenty. Chatter accompanies every Apple conference. The company is highly visible and wildly popular in the computer, gadget and music industries. All the watchers think they know what's at the core of an Apple event before it happens.

iPods: Apple hasn't released a new iPod Classic or Nano, with the scroll wheel, in eight or nine months. Analysts think it's time for a refresh -- or in the case of the Classic, maybe it's time to take it behind the shed and put it out of its misery. Many seem to be betting on most of the iPods getting a digital camera.

The Beatles: Being a conference about "rock and roll," as it says in the invitation, it's not far-fetched to believe the biggest rock band ever may be involved. Apple's news conferences are traditionally held on Tuesdays, but this Wednesday announcement happens to fall on the same day as the high-profile release of the Beatles: Rock Band game and the band's remastered CD catalog.

The Fab Four have yet to release any of their music digitally -- the Rock Band game is as digital as they're getting so far. An EMI spokeswoman says ...