Interesting take on literal Music swapping
06-08-2006 01:15 PM
Interesting take on literal Music swapping
NEW YORK -- A new website that aims to transform music-industry economics is set to go live Thursday, giving musicians a major cut of the proceeds while largely freezing out record labels and other intermediaries.
La la, which allows fans to trade music discs for just $1 plus shipping, pledges to give a fifth of its sales to all the musicians, including lesser-known session studio players, involved in the making of CDs exchanged on its site.
In a move that is certain to stoke controversy with music promoters, the founder of the Silicon Valley startup said la la will circumvent traditional copyright and royalty payment systems to compensate identifiable working musicians.
The site works something like an eBay auction exchange as it encourages consumers who sign up for the service to list all the CDs they may want to exchange as well as ones they would be interested in receiving.
Once an exchange is arranged, the recipient pays $1.49, of which 49 cents pays for shipping the disc, leaving $1 for the company for musicians, administrative costs and its own cut.
La la said 20 cents of each $1 will go into a charitable fund for the musicians. It is looking to pay the musicians via a charitable organization it has set up called the Z Foundation. It plans on keeping 20 to 30 cents for itself, with the remainder going for administration.
"We all have this music that sits in our homes -- wouldn't it be great if people can exchange those CDs," said founder Bill Nguyen, a serial Silicon Valley entrepreneur.
He's a veteran of startup companies including Seven, a mobile e-mail ***** to BlackBerry maker Research in Motion, and OneBox, which was sold to Phone.com, which is now known as Openwave.
La la has been testing the service for several months with nearly 100,000 people and claims to already have another 200,000 people waiting to join the service when it goes live.
The service is bound to raise eyebrows at record companies, which have stepped up their antipiracy drives in the last few years to combat both CD and digital music piracy.
But a spokeswoman for the Recording Industry Association of America said that, "To date we have declined comment on lala.com -- and will hold to that here as well."
Nguyen admits his company has had a mixed reaction from the record companies, with some viewing his plan as a threat along the lines of the pioneering peer-to-peer music file-sharing service Napster.
"One label thought it would help them to know their customers for the first time," Nguyen said. "But others' view of us is as the devil, more like peer-to-peer services."
La la argues that it is offering a vibrant new way for consumers to discover new music and that, if successful, it will encourage robust sales of new music, unlike the culture of pirated CDs and downloading that followed in Napster's wake.
Nguyen claims that la la's research shows that for every five CDs exchanged on the server a new CD was bought.
Though la la is a for-profit business, Nguyen envisages a community of fans and musicians running many key elements of the site with a relatively skeletal paid staff that he plans to keep under 30 employees.
For instance, fans and artists will jointly decide whether a musician who applies for compensation will get paid under the system. Nguyen described the site as having a business model inspired by Wikipedia, the online encyclopedia built from editorial contributions by its users.
La la has received up to $9 million in venture capital funding, Nguyen said.
06-08-2006 04:06 PM
Record companies need to wake up and realize their intellectual property rights will change or die, and most likely die anyway, if they don't start going with the flow of technology rather than fighting it. That some are looking askance at this is a bit ridiculous. The copy you buy is supposedly your property, and while it's technically illegal to reproduce it is not illegal to swap or sell your legally aquired copy. Reminds me of the publishing industry's attempts to shut down used book stores and get copyrights extended to infinity.
06-08-2006 04:14 PM
Personally, I like watching those companies squirm...
MAke a new copywright and brag over the new technoligy,.. 2 days later it's cracked, and all over the internet making you look like fools! (video encryption comes to mind, and Sony's thing with their CD's)
It's already dead. Anyone who wants free (or cheaper) music can preatty much get it.
I havent bought a CD in like 5 years
06-08-2006 07:21 PM
I'm understanding of musicians' and authors' desire to protect and profit from their works though, and that just doesn't happen with a free download. Still, it's about time these companies tried other models of doing business. They're still stripping unsold paperbacks and sending them back to the publishers for God's sake. Something's got to change in both industries. A model that gets the money to the artist and not to the big companies would I think be very popular.
Originally Posted by xtraflossy
06-08-2006 07:35 PM
Only music I like paying for is for bands that make very little money in the first place. As in "my truck broke down, there goes the tour" (this really happened to a band I like). Or another band Im into has the copyright logo crossed out on the cd cover. I will never copy their music.
06-08-2006 07:59 PM
I download songs I like from the radio and search for a few more and if they are good i'll buy the cd. Keeps me from buying worthless cd's.
06-09-2006 09:35 AM
I'm with you, I generall shy away from most mainstream stuff too. Most CDs you see in your standard record store though are put out by artists who make very little money. The bigs ones we all know, I'd say a good 90% of them though make most of their meager funds from touring. Anyways, give me a good bar band over some super rock band any day.
Originally Posted by Rivet
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