This interesting tidbit about Lala's peer recommendations is in a piece at ReadWriteWeb about the different ways to approach music recommendations.

Other services, like Lala, have decided to not feature any real recommendation technology at all. Instead, Lala purely relies on users following each other on the service and recommending new music to each other.

At least for Lala, this approach seems to work very well. When we talked to Lala's founder and CEO Bill Nguyen last week, he pointed out that 70% of all the music listened to on Lala was new music that was not already in a user's music locker, and that 18% of new music listened to on the service is bought and added to collections.

My computer is streaming a new release (Bruce Springsteens' Working on a Dream) at from Lala as I type this. I use the site extensively and prefer it for browsing and sampling each week's new albums and singles. Quite often I will purchase a "web stream" (ten cents for unlimited streaming) or an MP3 download. Lala's prices are very competitive -- most standard albums cost $7.49 -- and I have purchased many albums.

The site is built upon peer recommendations (while at the same time staying focused on music rather than social networking). I follow what friends listen to and occasionally get recommendations or gifts from them. When on an album or artist page, users can see who listens to specific artists (they're ranked according to the influence they have on others). That provides a good way to browse collections and see what others are enjoying.

Peer recommendations carry far more weight than those generated by algorithms. Any hardcore music fan who tries mufin, the algorithm-generated recommendation engine, is likely to be disappointed. I cannot trust a site that tells me there is some kind of connection between Glenn Branca, the avant-garde guitarist/bandleader, and prog dinosaurs Uriah Heep. You've got to be kidding me.

There's a faction out there that doesn't get Lala's model. Why pay for webstreams? Why listen to your music through a browser? Why not use algorithms in addition to peer recommendations? The way I see it, Lala is set up for the more ardent music lovers. They like to share, they like to browse and they would pay for a simple, ad-free service. When you wonder who would pay for music (at all, given the free options out there) consider the value of metadata. The assurance of proper metadata is enough to drive some consumers to paid services. There is similar value in an absence of hassles and the connectedness of knowledgeable music fans. And whether it's Lala or another store/service, there will be opportunity beyond free.

Posted by Glenn at 1:11 PM | Link
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David at Digital Audio Insider has a post about his band's first CD Baby royalty statements with payouts from Lala.com and Verizon. Lala.com paid out about 0.55 cents (pre-CD Baby fee) per stream while Verizon paid out $0.85 for a song download.

Lala.com has on-demand streams, the kind that demand a larger royalty. Non-interactive streams pay less.

Posted by Glenn at 5:57 PM | Link
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While reading a Bob Lefsetz mailbag email with reactions to Lala, I couldn't help but notice the contrast between the reactions of the music industry and the tech industry. (Bob does not post reader mail to his blog, he compiles commentary and sends it to his email list. So, sorry, no link to the reader mails I'm talking about.)

Like I mentioned a few days ago, nearly all the initial press -- tech writers, for the most part -- was positive. They found the user interface to be graceful and easy to use. They like the idea of buying a webstream for $0.10. They appreciate the fact that Lala is free of ads so the site can offer a better music experience. They like the social features and the way the site encourages discovery.

Lefsetz readers, who for the purposes of this post represent the music industry, pretty much hate Lala. They don't like the idea of putting their music collection in the cloud (even though the files are merely copied, not transferred). They sang the virtues of the file over streaming -- freedom, ability to listen offline. And many wondered why they should support a service that (currently) only works at a computer. I'm very surprised, frankly, that they are so worried about losing their online collection and purchased webstreams (a measly ten cents apiece) if Lala shuts down -- losing one's hard drive is the real worry.

All in all, their comments reminded me of the CD vs. download debate at the beginning of the decade. (I want to own my music! I want the ease of downloads! Compressed files sound like garbage! I want something tangible!) Since then, people have become more comfortable with buying some/all titles on CD, some/all via downloads, some/all on vinyl, etc. There is no one single way to buy music, and the best way to buy music is the way that matters to you.

The moral of the story is consumers have many different preferences for purchasing, listening, cataloging and storing music. Such is the plight of today's music services. They can either try to do all things for all people, or they can cater to a few listening habits and work those niches. Reactions and product reviews (namely SanDisk's slotMusic) should be read with this in mind. What sounds great to one group can fail with another. A product that gets lambasted by one group can find favor with another group.

Posted by Glenn at 2:53 PM | Link
|Lala.com|

Lala, the frequently changing streaming service/download store/online music locker has made some changes aimed at an easier user experience and music discovery. Whether or not it will connect with consumers, the new Lala has set itself apart. More serious music fans should take notice.

First off, Lala has licensed tracks for all majors and thousands of indies. Its Music Mover application scans your music files and checks them against what is on Lala's servers. Since the company has licenses to make a copies of songs on its server, the time to upload your collection can be shortened considerably. A few weeks ago, five out of every eight songs in my collection needed to be uploaded byte by byte. That is not the case now.

Second, Lala has an impressive widget called (ready for the pun) Forecast. A user can put four songs on a Forecast widget and place it on a blog or Facebook page. The difference about this widget is its simplicity. A Lala user can opt to purchase a web stream (an unlimited, ten-cent stream of the song that acts as a credit if you choose to purchase the MP3), follow that user's Forecast or see which users are following that Forecast. Every action requires a single click. It is the easiest way I've seen yet to keep tabs on other users (meant to be tastemakers in this case) and make a purchase (again, it's a stream in this case but it can be upgraded to an MP3). Right now, heavyweight music bloggers like An Aquarium Drunkard, Muzzle of Bees and My Old Kentucky Blog have Forecast widgets. At Lala, there are social features that allow you to track friends' songs and playlists and share songs.

Lala is different because there are no advertisements. In this New York Times post, chief executive Geoff Ralston talks about the site's aim toward music fans. "You want to help people discover music," he said. "You don’t want to slow them down with ads." Agreed. I have used Lala for months because it is ad-free, free of clutter and is more music service than social network. Even though streams cost money (unless you own the track), Lala is light years ahead of the much-trumpeted MySpace Music in terms of usability. Creating a playlist at MySpace Music is a tedious, time-consuming process. At Lala it is almost effortless.

Will the model work? Labels are happy to give it a go. Said Warner Music Group head of digital Michael Nash, "The psyche of the music industry right now is that not experimenting is riskier than experimenting." (Lala counts Warner Music Group as an investor.)

Interesting tidbit in Billboard.biz's article: since the beta launch in May, between 30% and 40% of web stream buyers ended up buying the full MP3.

Lala is currently available to U.S. users only.

More commentary:

• TechCrunch. A very positive review. Comments are more positive than I expected. Lala's ten-cent streams were not well received when the beta was announced (maybe not at TechCrunch...I couldn't find a post on the beta). Looks like things have changed.
• VentureBeat. "Lala convinces record labels to be a little less dumb." According to the LA Times' article, it was Sony BMG's Thomas Hesse who took credit for the idea of web streams.
• Technologizer.
"What’s impressive about Lala isn’t just the number of things it does, but how well it does them." Agreed.

Posted by Glenn at 12:25 PM | Link
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Michael Robertson has a post on the new Lala.com. He points to Warner Music Group's investment in the company and raises doubt about the business model. He and I differ on the new Napster MP3 store (I don't think the size of the catalog is a worthy point of differentiation) and we differ on this, too.

Will people pay ten pennies for a restricted web song with pseudo ownership? I have serious doubts. People prefer free stuff on the net and there's plenty of it. You can get full length streaming versions of U2's Pride on Napster, Imeem or even better your choice of 6 videos from YouTube for free. So what would convince someone to buy the Lala version?

The ten-cent stream rights may or may not be a big draw or a big source of revenue. At the very least, I think consumers will be able to better wrap their head around buying unlimited streams for ten cents than buying a protected music file for a dollar. Listening to music streaming on a PC is an established behavior. People obviously accept the limitations inherent in streaming audio.

The ability to stream any song just once -- and a person can stream an entire album once as well -- could end up being a good enticement to purchase. The key to Lala.com success will be the degree to which is makes finding, sampling and buying music easy. In my opinion, it is an excellent source for doing all three.

Robertson does point out that purchasing the right to stream a song is worth something only as long as the company is a going concern. But at ten cents each, I personally wouldn't worry about it. The loss of an infinite number of song streams is far better than the inability to play a purchased Windows Media file because Microsoft stopped supporting the DRM. For ten cents a track, I'd recoup my investment pretty quickly.

Extra credit reading: Slashdot has an entry on Robertson's post. If you need some amusement, scroll through the comments and note how many people don't realize you can stream music as well as purchase MP3s. Quite a few commentators obviously never got past the title of the post ("Would You Rent A Song For A Dime?") and complain that Lala.com is not giving people DRM-free music.

Posted by Glenn at 11:19 PM | Link
|Lala.com|

Lala.com is back for another shot at music lovers. Like the previous version, its new model is built around the belief that access to free music streams will bring in users and generate enough revenue to make the strategy profitable. This belief fueled the previous-yet-short-lived version of Lala.com that offered unlimited streaming in hopes of making money from CD and download sales.

The new Lala.com (current in beta) has a few good aspects and one very unique feature. The most notable thing about the new site is the ability to purchased unlimited streams of a song for only $0.10. MP3s of songs and albums can be purchased as well, though selection is very limited right now. Once an MP3 is purchased at Lala.com, the user can stream it at no charge. Users get to add 50 song streams to their catalogs at no charge. Each track can be streamed once; further streaming, beyond the 50 free adds, require a $0.10 purchase.

The user's music library can be added to the user's Lala.com library and streamed free of charge. An application called Music Mover uploads the user's library (but does not recognize files with DRM). And because the service is web-based, a library can be accessed from any computer.

Also worth noting are the low prices (for the time being, at least). Death Cab For Cutie's new album, Narrow Stairs, goes for $7.49 at Lala.com (it costs $8.49 at Amazon.com). Talk Talk's Spirit of Eden, which regularly goes for between $5.99 and $6.99 depending on the store, can be purchased for $4.49.

The billion-dollar question facing the industry this decade is how to balance the stick and the carrot. Like the upcoming MySpace Music, Lala.com will test consumers' willingness to purchase when lured by free music. Free music an improvement over the previous carrot, 30-second samples, and a huge improvement from labels' use of the stick with downloaders and universities.

As Digital Audio Insider pointed out in his post that tipped me off to the new Lala.com site, the success of this type of service hinges on how people use subscription services. If they are content with streaming relatively few songs, Lala.com is a good option. But the few that use subscription services like volume and variety. Since a subscription's monthly fee is a recurring sunk cost that is out of sight (it's simply charged to a credit card), acquisition is less painful than buying $0.10 streams one at a time.

If the end goal is ownership of MP3s and CDs, Lala.com's strategy makes more sense than subscription services. Since Lala.com does not offer portability -- just online streams -- there is clear benefit to buying an MP3. With subscription services, one can opt for portability without upgrading to MP3.

If Lala.com has anything going for it it is its ease of use and thoughtful design. It's a wonderful place to sample, browse and listen, and is far more enjoyable than the new Napster MP3 store.

Posted by Glenn at 10:24 AM | Link
|Lala.com|