Los Angeles — First a CD-trading site, then a free Web-based music browser, Lala.com is no longer interested in just being a Web radio station. The site is geared up to re-launching Tuesday as a hybrid, browser-based iTunes competitor that enables users access their music libraries from anywhere they can access the Web and the free music streaming of MySpace Music without the ads.
It matches in look and feel to Anywhere.FM, which is basically a Web-based iTunes clone, but Lala adds some nifty features.
Lala started in 2006 as a CD-swapping site. In June 2007, it re-launched as a service that enabled visitors to listen to any song — though only from the Warner Music catalog — free of charge in anticipation that they would then buy CDs. The company shut down that service two months later because it had to negotiate licenses with the major recording companies and independent labels.
Its first version lacked standard and the second was met by numerous me-too players from MySpace and iMeem to Last.FM, said co-founder Bill Nguyen.
The music service — now embarked on its third incarnation — is offering a simplified way for consumers to store songs in digital storage lockers and access them from any Web-enabled device. For those of you who have been around a while, this may sound a lot like MP3.com or even MP3tunes.com, companies started by Michael Robertson, the serial tech entrepreneur.
(MP3.com is now owned by CNET News publisher CBS Interactive.)
But 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. Since 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 do not sell music,” Nguyen said.
The way these services functions is users upload their music libraries “to the cloud,” and then they can be accessed from anywhere. It is great for accessing your music from public or work computers, or from Wi-Fi-enabled devices.
The initial upload process can take a long time though, and Lala streamlines it considerably by not actually requiring you to upload every song. The service analyzes each MP3 or iTunes Fairplay track in your library, and only uploads the ones it does not already have, giving you access to the rest on its own and saving you a bunch of time.
Users of lala.com’s test site — that number nearly 300,000 — are buying enough music to put the site on the path to profitability.
During the testing phase, 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.
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.
Some other cool features in Lala: The user interface is intuitive, and when a song is playing, it would not be interrupted when you navigate around the site.
Like Anywhere.FM, Lala includes the typical social networking functions. For instance, you can find and make friends, see what they are listening to, and recommend or gift them songs. You can share tracks on Facebook, watch the YouTube video of the song, and embed your playlist with just about any social network or blogging platform.
The Palo Alto, Calif.-based private company is backed by $35 million in venture capital from Bain Capital LLC, Ignition Partners and Warner Music Group Corp., first launched in July 2006.
But Lala has its work cut out for it, industry analysts say. It has to rise above the ruckus coming from all the new digital music services, big and small.
“Lala has been on a roller coaster ride since its inception,” said Susan Kevorkian, an analyst with IDC. “They keep taking risks and new directions. The hope is that they have not alienated users.”
“You have got to face it; there is nothing you do not do in a browser,” said Bill Nguyen, Lala.com cofounder.