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hbgator

Tue 07 Mar, 2006


Online music service to let users swap CDs

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A new online music service called La la Media Inc.<b style="color:#FFA34F"></b> aims to offer full-length CDs for <b style="color:#FFA34F"></b>$1 by letting users trade discs,<b style="color:#FFA34F"></b> in a bid to avoid legal pitfalls that face online song trading.<b style="color:#FFA34F"></b>
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Backed with <b style="color:#FFA34F"></b>$9 million in funding by Bain Capital and Ignition Partners,<b style="color:#FFA34F"></b> La la works like an online music co-op by enabling members to trade physical CDs they own for physical CDs they want,<b style="color:#FFA34F"></b> Bill Nguyen,<b style="color:#FFA34F"></b> co-founder of La la,<b style="color:#FFA34F"></b> said ahead of the Tuesday announcement.<b style="color:#FFA34F"></b>
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With 1.8 million album titles available,<b style="color:#FFA34F"></b> members trade the CDs in prepaid envelopes,<b style="color:#FFA34F"></b> much like the way popular mail-order DVD service Netflix Inc.<b style="color:#FFA34F"></b> operates.<b style="color:#FFA34F"></b>
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La la founders argue that,<b style="color:#FFA34F"></b> unlike underground online file-sharing services,<b style="color:#FFA34F"></b> which have been sued for copyright infringement,<b style="color:#FFA34F"></b> La la is protected under an exception to the U.S.<b style="color:#FFA34F"></b> Copyright Act.<b style="color:#FFA34F"></b> They argue that the owner of a CD can transfer a legally-acquired copy without permission or payment of additional royalties.<b style="color:#FFA34F"></b>
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Members will pay <b style="color:#FFA34F"></b>$1 to La la for facilitating the trade once they receive the disc from other members,<b style="color:#FFA34F"></b> plus a 49 cent shipping charge.<b style="color:#FFA34F"></b>
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La la said it will set aside 20 percent of its trading revenue to recording artists.<b style="color:#FFA34F"></b>
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La la said it is currently talking with the world's major music labels to obtain licenses for the sale of digital music.<b style="color:#FFA34F"></b>
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La la founders said the record industry will benefit from the music's increased exposure and sales through the site,<b style="color:#FFA34F"></b> which enables members to buy albums they can not get for trade from other members.<b style="color:#FFA34F"></b>
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La la enables members to buy a physical CD new and hopes to eventually offer digital album downloads at retail prices,<b style="color:#FFA34F"></b> but does not plan to offer digital downloads of singles.<b style="color:#FFA34F"></b>