Lala.com gives digital music another try

[Jim]

[size=7]Lala.com gives digital music another try[/size]
[size=5]By RYAN NAKASHIMA[/size]

First a CD-trading site, then a free Web-based music browser, lala.com is being born again.

The site is relaunching Tuesday as a hybrid, offering the digital download functionality of iTunes and the free music streaming of MySpace Music without the ads.

The Palo Alto, Calif.-based private company, backed by $35 million in venture capital from Bain Capital LLC, Ignition Partners and Warner Music Group Corp., first launched in July 2006.

Its first version lacked scale and the second was met by numerous me-too players from MySpace and iMeem to Last.FM, said co-founder Bill Nguyen.

This time around, listening to any of the 6 million tracks at lala.com will be free. It will cost 10 cents to put a song in a Web locker for unending access on any computer where the user logs in.

Another 79 or 89 cents allows the user to download an MP3 track, with no digital rights management coding.
Because the site is ad-free, the business relies on selling Web tracks and MP3s.

"Where we get into trouble is if we do a lot of streaming and we don't sell music," Nguyen said.

Users of lala.com's test site — who number nearly 300,000 — are buying enough music to put the site on the path to profitability.
In the testing period, for every 1,000 free streams, the site sold about 60 Web songs and 60 MP3s. It needs to sell 15 to 20 of each per thousand free streams to be profitable, said spokesman John Kuch.

Users can upload their own music from CDs and iTunes into their digital locker for free. This gives lala.com enough knowledge of an individual's tastes to be able to market similar songs to him or her, a technique that boosts the sell-through rate about fivefold, Nguyen said.

The site has the participation of all four major record labels — Universal, Sony, Warner and EMI — and 170,000 independents.
Thomas Hesse, president of global digital business for Sony Music Entertainment Inc., said a key reason for licensing music to lala.com and other sites like it was the ability to sell music downloads.

"We do streaming deals that also have an upsell opportunity," Hesse said. "To us, that is an important side-by-side concept."
Sony's digital music sales represent more than a third of its U.S. revenue and are on pace to exceed revenue from physical CDs "fairly soon," Hesse said.

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This site is really cool; after reading this article I went over and checked it out. The homepage is slick and upon loading you are presented with the 10 most popular songs. When you play a song, a small, slick flash applet appears at the top of the screen and displays the song information as well as simple controls and a progress bar. You can still search for songs while you have one playing. Registration is free and I would recommend it if you plan to use the site a lot as it constantly bugs you to register when playing songs. Had to play a song to test the quality ( John Mayer - Free Fallin' / 12 Stones - The Way I Feel), it sounds pretty nice.

[Tami]

It's good to see the labels involved - maybe they've finally realized that digital downloads aren't for scoffing at, after all.

[Josh]

Interesting service. I would like it better if I could listen to the same track more than once. It's almost like they are scared of no one buying the music and just streaming. I can't listen to a song just once and instantly love it and want to buy it (usually). It has to grow on me. (E.g. Pussycat Dolls - When I Grow Up, or Katy Perry - I Kissed A Girl) If I could listen to the same track all I want then MAYBE I would use the service more, but that put a huge damper on the service for me.

It is good to see that music is steering towards this direction though. I don't know about you, but I hate going to the store to buy a CD. Too many stupid people walking around that annoy me /blum.gif\' class=\'bbc_emoticon\' alt=\':P\' />

[Jim]

That and a lot of times I will buy a CD for two or three songs and not necessarily the entire CD; always felt like I was wasting money. This way you can listen to a song before you purchase it.