We continue to report on interesting P2P Exchanges:
LaLa is a really neat idea: “it works like an online music co-op where members trade-in CDs they have for CDs they want from other members. CDs are sent through the mail in pre-paid envelopes provided by ‘la la’. “Trading CDs is an affordable way to experiment and try new music,” said Bill Nguyen, ‘la la’ co-founder.
If an album is not immediately available for trade, members will be able to buy the CD new or as a digital download at retail prices. Nguyen continued, “When you find that album you can’t wait to enjoy, ‘la la’ will offer it as a new CD or a download.”
TechCrunch recently reported on its most recent inititiave:
“In a bizarre amalgamation of virtual and physical business, the dying independent terrestrial turned internet radio station WOXY is being revived by online CD swapping service Lala. Lala is tangible evidence that online music doesn’t have to kill the CD industry. At first I was skeptical, but after spending more time on the site I think this radio strategy is very smart. See also our previous coverage of the company here.
Lala users identify CDs they want mailed to them for $1 plus 75 cents shipping. Other users who have those CDs available for swapping are notified and put them in the mail. Lala keeps the dollar and donates a portion of it (as much as $50k in a month so far) to a Foundation that supports artists. Users can also chose to purchase CDs for immediate delivery.
Now the company is taking over WOXY to allow users to create streaming radio stations that will in turn inspire CD swapping and purchases. Station listeners can click to request a swapped or purchased CD that a streaming track originates from. The music available for creating the radio stations is licensed from a third party. Lala plans to invest between $5 and $10 million into the station.”Â
Here’s a still interesting older comment on its business model:
“LaLa.com allows individuals to trade their own CDs with each other. Someone recently wrote me to say LaLa.com is based on “facilitating piracy.” It’s sad that any time a novel sharing service comes out, the first instinct is to demonize it rather than find a way to embrace and monetize what music fans so obviously want.
LaLa.com is just like eBay in two senses. First, LaLa.com enables a more efficient market by reducing transaction costs in ways not possible in the offline world. Second, people already had the ability to sell their CDs via eBay — LaLa just modifies the model.”
Don’t get me wrong — some are going to use LaLa.com in illegitimate ways, but many will use it for legitimate purposes. People who bought their CDs — and thus already paid licensors — have the right to give away their own property in this way.
In today’s world, almost everything facilitates piracy to some extent. Computers make copies; the Internet distributes copies. There is P2P, there are darknets, there are sneakernets, there are campus lans, in 5 years people may be swapping HD-DVDs worth of music and in the next 15 years maybe a single keychain memory stick will hold the entire universe of recordings.
Artists will get paid in this world, but they’ll get paid differently and, I would contend, more. Lala is certainly part of a larger structure that’s upsetting settled business models. That doesn’t mean that it is simply “facilitating piracy.” To define it as such is unfair.
Regardless, given the myriad other thoroughly convenient methods people can unlawfully acquire copyrighted content, excuse me for not worrying about Lala as a mortal threat. Downloaders (as opposd to uploaders) on P2P have little vulnerability. Swapping CDs filled with mp3s is far easier and costs less than using LaLa.
And for what it’s worth: LaLa is giving 20% of its revenues to artists. That’s a better deal than they ever got from used record stores. What’s more, LaLa is reportedly losing money on every CD trade. It’s planning to use CD trading as a loss leader to sell CDs and online downloads — that’s right: LaLa only survives if it helps artists sell more records.”