LaLa's Latest Trick: Rent A Totally Limited Song For $0.10

from the gotta-give-'em-credit-for-trying dept

Thu, May 29th 2008 1:11am — Mike Masnick

Over the last few years, we've questioned LaLa's business prospects multiple times. Here was a company that has generated for itself a ton of press -- and a ton of investment money, and we can't figure out why. First, it launched a tremendously hyped up platform for trading CDs. It got widespread mainstream press coverage, despite the fact this was nearly the identical model of another company, Peerflix, who was having trouble getting enough people to bother (not to mention all of the failed "bartering" sites of the dot com bubble years). Even more bizarre, this very much for-profit company, that had (at the time) raised $9 million in venture capital, somehow convinced a NY Times reporter that it wasn't in business to make a profit, and that it was just doing this for the love of music. Uh huh.

Since then, the company has gone through a variety of different business model changes, each one more hyped up than the last. However, each one was equally questionable for anyone who followed the trends in the industry and understood basic economics. Late last year, the company apparently agreed to sell a chunk of equity to Warner Music. Warner, by the way, is widely rumored to have its lawyers going around threatening any music-focused startup that doesn't sell a chunk of itself to Warner, that it will sue them. In some cases, it sues, and then part of the "settlement" is a huge chunk of equity. That's apparently how it got a piece of iMeem, and it's the same thing Warner is supposedly doing with Seeqpod and some others as well. Either way, Lala took the bait rather than get sued, and together they're now getting to launch their latest bad business model.

Slashdot points us to the news, amusingly broken by the CEO of a Lala competitor, Michael Robertson, explaining how Lala and Warner Music want to rent you songs for $0.10/song. These are songs that can only be accessed via the web. They're quite limited and Warner/LaLa could certainly change the terms at any time leaving you out in the cold. While $0.10/song might get some attention if it were to own the actual files -- such a limited "rental" system that doesn't even allow you to put the songs on your iPod seems like it will be the latest in the list of business models LaLa tests out. At the very least, you have to give them credit for trying.

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Filed Under: drm, renting music, web music
Companies: la la, warner music group

15 Comments

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Rob, 29 May 2008 @ 3:04am

Pay for renting...
Why pay 10 cents a piece, when you can go to hundreds of radio websites, along with yahoo, msn, aol, etc to listen to full length songs for free. These guys are a tad stupid. They'll be out of business by 2009.
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Anonymous Coward, 29 May 2008 @ 4:28am

Well, their plan is obviously to deal with stupid people.
Take your idea to the next level. Get the stuff for free from torrents. Dur...
Silly non-piracy people.
Yarr!
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DigitalAngel, 29 May 2008 @ 5:24am

I admit, I am a fan of "renting" music. However, I think this idea is bogus. Like Rob pointed out, you can stream music for free on radio websites. On the flip side, services like Zune Marketplace, Napster, and Rahpsody allow you to rent music and put it on a device. While possibly cheaper to get the songs from LaLa (I'd have to download 150 songs a month for the Zune to be the same), it's worth the extra money for portability.
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Dave, 29 May 2008 @ 5:53am

You missed a part
The part that makes money is you pay $.10 for the on-line version and, if you like it, pay 75 cents more for a DRM free version.
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www.custompcmax.com, 29 May 2008 @ 6:28am

Since there is no portability, this formula will likely fail. The overall idea is a decent one... pay .10 cents to hear a song online, and then another .75 cents for the full DRM free version. But, then again, why would you want to pay for a preview... it should be free. If anything, this is going to upset a lot of people when they hear... ".10 cent music downloads..." only to get to the site and realize that the .10 download is completely gimped, and they need to spend another .75 cents to get the "usable" version. It is a marketing ploy to get peoples attention.
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Capitalista, 29 May 2008 @ 7:33am

Take a break!
You guys (techdirt) are earning your livelihood just by bitching about others. Let them earn their by providing cheap music.

Whats your problem??
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That Guy, 29 May 2008 @ 7:37am

You Can Download Mp3's From Lala
Like the Slahdot blog the Techdirt version is inaccurate as well.

You can purchase and download DRM free mp3's from Lala and you can put them on your ipod. The mp3's from Lala only cost .89 cents are they are cheaper than Amazon, iTunes, and Wallmart.

You can also opt to buy a song and store it on Lala's servers for .10 cents. This is great for people who listen to music online and want to check out an alubum before committing to buying the mp3 version. If you decide that you like the songs enough you can always download the tracks in mp3 format for .79 cents. They give you a .10 cent reduction for the mp3 download since you already paid .10 cents to store the tracks on the Lala servers.

To check out the Lala site go to next.lala.com.
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Sean Garrett, 29 May 2008 @ 7:52am

"amusingly broken by the CEO of a Lala competitor"
c'mon... when a competitor tells you what you can and cannot do with a new service, do you think you are getting the whole story?
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Yakko Warner, 29 May 2008 @ 8:54am

What's so bad here?
This doesn't seem so bad to me. You pay much, much less for the version with less value (stream-only), and if you want to upgrade to the MP3 version, that option is available, for a price that's competitive.

They're working two business models: on-demand streaming for $0.10, and music downloads at $0.89, and even providing a way to cross from one to the other. Sounds like an interesting idea, at least worth watching to see how it pans out in the marketplace.
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Matt, 29 May 2008 @ 8:56am

I like it!
I've been using this site for a while now, and I think it's great! I love being able to listen to a full album for free, and if I like it, I add it to my playlist.

Another great feature is being able to upload your own music. I've spent some time adding a good chunk of my music collection to the site, and it's awesome being able to access my library from anywhere.

and yeah, as That Guy mentioned above, you can download mp3s for under a buck.
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JS Beckerist, 29 May 2008 @ 9:55am

Re: Pay for renting...
2 things:

"At the very least, you have to give them credit for trying."
--ZING! Psyche!

Also, to reply more specifically to you, Rob:
http://www.pandora.com/
Can't go wrong.
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Anonymous Coward, 29 May 2008 @ 12:19pm

Re: Take a break!
-_-;;
Wouldn't it defeat the purpose of this site if they stopped "bitching about others"?
Plus, you obviously read this site. If you have a problem, feel free to stop reading it.
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Ed, 29 May 2008 @ 12:36pm

Re: You Can Download Mp3's From Lala
This has nothing to do with this case specifically, but, as with anything that deals with amounts in cents, a few of the comments here are using incorrect Verizon Math. Please, let's nip that in the bud or any kind of micropayment system will be doomed to eternal customer confusion. ".10 cents" is one tenth of a cent. You mean "10 cents" or "$0.10".
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unknownsoundman, 15 Jun 2008 @ 12:03am

$0.10 songs
$0.10 Cent songs...that is not new.
They should put the kiosks in restaurants
and bars and ...by the way....
Who owns the patent on the juke box?
Sounds like Wurlitzer has need of a lawyer.
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dereck, 4 Feb 2009 @ 5:44pm

wow
Thanks for this infos bro!
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