LaLa: Legal Music Sharing?

**drmomentum**[$] · #1 06-13-2006, 03:38 AM

http://www.lala.com/

This is interesting. It's a site that allows you to trade your old CDs with other members. They're not direct trades. You list CDs you have and CDs you want. The system tells you when it wants you to ship a CD to another member (via packaging that they provide). You are notified when you have a CD coming your way.

When you are shipped a CD, you're charged $1 for the CD and $0.49 for shipping. Also:

Quote:

[...] artists should make a lot more from each CD. 'la la' is taking the unprecedented action of giving artists 20% of our revenues from used CDs, no used record store or online site does this today.

How many CDs you receive is based on "karma" (which is calculated based on the CDs you ship, whether they're in good condition, whether you include liner notes, etc)

It's legal, and they contribute to artists. Will the recording industry try to kill this? And, how?

**taurusmoon** · #2 06-13-2006, 05:31 AM

What an awesome concept!

JP, have you participated in this program?

phoenixx · #3 06-13-2006, 07:22 AM

Interesting idea. the RIAA should hate it, as per their usual MO.

**pippadaisy**[$] · #4 06-13-2006, 08:05 AM

That does sound pretty cool. But the RIAA will go after them. It's not really about the artist, you know.

**drmomentum**[$] · #5 06-13-2006, 08:13 AM

Yes, I just got started.

I got my first CD yesterday and another is on its way. I also just got my starter kit yesterday and am shipping 3 CDs out today.

They're CDs I would have sold on Half.com if I could have gotten anything for them. This is more interesting anyhow.

-JP

**drmomentum**[$] · #6 06-13-2006, 08:17 AM

My page:
http://lala.com/frontend/action/karm...en=40688@10603

BTW - just because you have a CD listed in your "have" area doesn't mean you have to part with it. You get to decide. However you don't know which of your "want" CDs are going to get shipped to you at any given time.

**taurusmoon** · #7 06-13-2006, 08:46 AM

I'll have to poke around in my CD collection sometime this week and see what I wouldn't mind parting with.

I'm out of storage room anyway.

*emeleel* · #8 06-13-2006, 08:53 AM

Hey, this looks REALLY cool! Thank you for sharing, JP!

**pippadaisy**[$] · #9 06-13-2006, 09:02 AM

Here's me:

http://www.lala.com/frontend/action/...en=62706@10824

My "have" list is going to have to wait until I can get to the basement.

I'll do the ones I can remember... we can list our entire collection, right?

*emeleel* · #10 06-13-2006, 09:12 AM

And here would be my (very short) page:

http://www.lala.com/frontend/action/...en=15618@10826

JP, I may get that Memory of Trees from you next week.

frazzledspice · #11 06-13-2006, 09:28 AM

There has been a market for used CD's for years--both in retail stores and in sites such as Half.com or Amazon. Recording artists don't make any royalties from the sale of used CD's or traded (directly or indirectly) CD's, so I don't see why this would be any more controversial than half.com sales.

Sites like PaperbackSwap and thebookcart have been using a similar system for book trades. Authors receive royalties on the sales of new books, too, and receive no royalties from recycling old books by sale or trade.

The only difference, I suppose, is the possibility that the person who trades the CD might have burned a copy of the original CD before mailing it out, or might have saved those tracks he wanted to keep to an MP3 player. Book traders almost never photocopy a book before trading or selling it.

frazzledspice · #12 06-13-2006, 09:54 AM

Interesting. According to the site owner, Bill Nguyen:

Quote:

I'll be the first to advocate that artists should make a lot more from each CD. 'la la' is taking the unprecedented action of giving artists 20% of our revenues from used CDs, no used record store or online site does this today.

So actually the recording artists are doing better if their CD's are being traded on LaLa than if they are purchased on Half.com

Nguyen also asks people shipping CD's to remove the songs from the CD from their Ipods or PC's before shipping, because it's not fair for them to keep the song if they are shipping the purchased CD they copied it from.

**pippadaisy**[$] · #13 06-13-2006, 10:00 AM

I'm going to liquidate our dups. G and I had a lot of CDs in common, but it's never been worth it to sell them.

**Joubert**[$] · #14 06-13-2006, 10:13 AM

The RIAA did make at least one statement that they were reviewing the matter, but the tone I got was that they were going to go for shutting it down.

You see, the artist typically doesn't own the music. The music label (sometimes a joint venture between artist and music company, sometimes not) owns the music. The RIAA, of course, is the trade industry group. My feeling is they will not let any site stand that cuts the owner of the music out of the loop.

As JP points out, there have literally been dozens of well-known CD swap sites in the last decade. My favorite was swapit.com. They sent me a T-shirt with the funniest saying "Trade Men Without Hats for Barenaked Ladies". Their problem was getting enough traction because the web was still too new for most folks. I guess this was around 1998.

Anyway, at an individual store level, music has been exchanged for at least 40 years, going back to the record co-ops that opened in the 1960s. The difference, of course, is that the internet gives the business venture global scale, almost no start-up cost or barrier to entry and no investment beyond the web site. They're supervising music swaps and taking a cut of each. Their brilliance was sending money to the artist. What they should be doing is paying the owner. And to do that properly, they would need music label cooperation, which they ain't gonna get because the label wants you to buy the music new.

Trade fast. RIAA isn't going to let them stay open too long.

**drmomentum**[$] · #15 06-13-2006, 11:37 AM

I wonder what legal angle they'll take, not that I have much knowledge there. Does the owner have any rights to the physical CD? I expect it's the same as arguments against the udes CD market, except this is more alarming to them because of the possible ability to scale and the availability.

I think the money thrown to the artists is just a philosophical thing -- supporting music and not ownership of music. And a marketing gimmick, of course.

**drmomentum**[$] · #16 06-13-2006, 04:32 PM

Up to 8 trades now.

**Joubert**[$] · #17 06-13-2006, 09:33 PM

I think the owner has a license to use the physical CD for private use. Once the physical CD is gone, your license is gone.

I remember Microsoft clamping hard on used MS software on eBay because they just knew that people weren't deleting the stuff. That's how Product Activation got to be such a pain. And before anyone flames me, Intuit posted horrendous numbers one year showing that the number of tax returns filed with Turbo Tax exceeded the number of units sold by 2 or 3 times. I don't recall the exact number, but it would have been enough to make any Intuit stockholder (which probably includes some of you in your mutual funds) scream.

I agree with you, JP. I think throwing the money to the artist is a diversion at best. And besides, the owner of the music is due the money.

A similar sounding site that I'm reallly intrigued by for writers and artists is www.lulu.com. The writing part is especially interesting because for $149, you can get your ISBN, get listed in Books in Print, end up in the Amazon feeds, etc. And it's all POD (print on demand) so while the cost of goods sold is high, there is no publishing company to take a healthy chunk. Same applies to music.

They're privately held so I'm having a hard time getting a handle on their numbers. Just read about them in Business 2.0. If I recall the numbers they quoted (which don't hold weight with me until I see financial statements), they brought in $1 million in revenue last year and project $12 this year. I have no idea of their debt load or licensing fees or how they amortized all that equipment. I'm thinking that if they outsource the royalties to someone like Ceridian or ADT, they could make the orgnaization's footprint pretty small.

**drmomentum**[$] · #18 06-13-2006, 11:33 PM

Yes - I agree. I can't legally keep any copies of these CDs I'm sending out. The license goes wiht the CD. Is that what you're saying? Or are you saying that the license is disolved and not transferrable at all?

If that's the case, then all of used CD sales are in trouble.

-JP

**Joubert**[$] · #19 06-13-2006, 11:36 PM

The first one. License goes with the CD you re-sell. That's how the record (and later CD) exchanges were able to survive without getting cease and desist letters. They had the physical copy. Sure, someone could dub a copy, but that wasn't an issue until CD burners came at the bottom of a Cracker-Jack box. Now, of course, you can make copies of CDs all day long and share them with all your friends. It's illegal and all, but if I were the music companies, I would be panicking too. The only control I had over my product in good condition was the physical product. Now that's gone.

phoenixx · #20 06-14-2006, 12:07 AM

Quote:

A similar sounding site that I'm reallly intrigued by for writers and artists is www.lulu.com. The writing part is especially interesting because for $149, you can get your ISBN, get listed in Books in Print, end up in the Amazon feeds, etc. And it's all POD (print on demand) so while the cost of goods sold is high, there is no publishing company to take a healthy chunk.

That site smells of a rip off. For the same $ you can get your own ISBN account which inlcludes unlimited ISBNS of self published books, both in print and on line, right form the source. Then listing on Amazon, BAMM, etc is also easy to do yourself, and once you have an ISBN, you can also get listed in the trade sites and publications on your own as well.

**Joubert**[$] · #21 06-14-2006, 12:27 AM

I don't disagree. Two differences. One, most people don't know how or don't want to hassle with forms. Two, most people don't understand the docutech process.

I have to respectfully disagree. I don't think it's anymore of a rip off than any other convenience charge.

What I find remarkable besides the fact that it has one of the better entrepreneurs of our generation behind it is that the traditional media has been so complimentary. It's not a vanity press. It's print-on-demand, which we were doing fifteen years ago, sure, but the web makes the world a lot easier.

There actually are no charges beyond the royalty should you choose to go it alone. But just like I can but won't file my own trademark and other IP paperwork, it's a nice convenience.

Then again, I'm the guy who bought Amazon Prime.