LaLa, The Black Sheep Of Music Startups, Just May Have The Right Formula
by Michael Arrington on December 16, 2008

LaLa doesn’t get nearly as much attention as the other streaming music services, probably because they actually charge users to listen to music. Sites like MySpace Music, Imeem and Last.fm all stream music for free these days. But LaLa only lets you listen to a song once. After that, you have to “buy” it for ten cents to listen to it as many times as you like, and add it to playlists.

Seems like a non-starter, right? But wait, there are a few reasons why LaLa has a real chance at success. First, they have an absolutely exceptional user experience, which was completely relaunched in October (and we loved it). Unlike all of the other services, LaLa gets you to the music you want to hear as quickly as possible, whether it’s through search, browsing or suggestions from friends. Creating and embedding playlists is dead simple, too (see below). The other services mentioned above take more steps to find music. Last.fm is the worst interface, it’s very hard for new users to figure it out. And both Imeem and MySpace Music have their issues too - too many clicks to get to music, and MySpace doesn’t allow embedding.

Second, LaLa is completely advertising free. It lets you play any song once without paying. After that you have to pay $0.10 to add it to your collection and stream it whenever you want. But you get 50 songs free when you sign up, so users can get a feel for the service before paying anything. If you choose to download a MP3 of the song for $.89 (which is already cheaper than the other services), you get that $.10 streaming fee back.

Frankly, the exceptional user experience probably isn’t enough to compete with the free services. But LaLa also has its Music Mover client for Mac and Windows machines. Download it and it identifies all of the MP3s and paid iTunes songs on your hard drive and adds them to your collection on LaLa. You don’t have to pay the $0.10 to listen to those songs stream. What this means - you can listen to all that stolen music you’ve been gathering since Napster days on any computer with an Internet connection. You don’t have to worry about copying the songs from one hard drive to another to access them.

That sort of makes LaLa perfect. You can listen to all the music you already have, and then get new music recommendations from your friends. Listen to it once and then add it to your collection for $0.10.

They also have an iPhone app coming that lets you listen to all your music streaming on that device. No longer will you be limited to the small hard drive on your iPhone or iPod and forced to make tough decisions on which music to upload.

LaLa also has plenty of money to let the whole music scene shake out. While competitors lose money on every stream, LaLa has a business model that they say doesn’t burn cash. And they still have $20 million of unspent venture capital in the bank.

The company tapped former Yahoo Chief Product Officer Geoff Ralston as their CEO in late 2007, and his product experience shows. The company has the best streaming music product on the Internet today, and a business model that doesn’t burn cash.

Competing with giants like MySpace and possibly Facebook isn’t trivial. And those competitors will eventually catch up. But they have to serve a certain amount of advertising to make their models work, a handicap that LaLa neatly avoids. Don’t count them out any time soon.

It’s the joy of using products like LaLa that keeps me excited about startups.

Responses

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  • First comment so Thanks You Lala http://www.jugargame.com/

  • Finally lala is getting some recognition. I love it because I can pretty much have my own library whereever I go… my iTunes library is on an external harddrive, so that makes music listening a difficult thing, if I want to use my laptop.

    Plus, I like that $.10 is deducted if you want to buy the .mp3.

    After bouncing from iTunes to Amazon for the DRM-Free factor, now it’s just the ease of access factor.

    • Exactly. Music library accessible from anywhere, super easy to add music to stream for $.10, DRM-Free….what more can you ask for? What’s that you say? An iPhone App? Yes….

      Been using Lala for about 2 solid months now and love it. Thanks for covering this…open your eyes music lovers, this could be the new wave…

      • Maybe I should try it too. Most of you might think that I’m a retard using Napster and paying 15 $/month for flat rate without having any mp3s.
        But I’m stuck with it now!

  • I’ve heard of them, but never really felt like trying another service. However, the Music Mover program seems like it might convert me into trying it out.

    A few years back I converted everyone of my CDs to MP3 and tagged them all. Since I finished that process, I’ve been all digital and bought all my music online at amazon and a few other “real” MP3 store (sorry iTunes).

    LaLa could end up being the perfect fit for me…

  • I just recently started using LaLa and at first I was turned off because you had to “purchase” ttracks to stream. However after going back and really looking at the service I found it to be quite amazing.
    The Music Mover is what sets it over the top but add that to the fairly cheap MP3 purchases and the easy interface and it is a hands down winner. But I have to admit that I still love Last.Fm’s radio feature…

  • Personally I like http://www.thesixyone.com I never know what is good in terms of music. They make it easy and you can just click play and it will go through all the songs. So simple. I don’t even need an account.

  • Agree the user experience is great–it’s the first music I’ve ever paid for since CD’s.

    Two problems with their music mover though:

    First, it only recognized about 50% of my (mostly) mainstream music collection.

    Second, it took over three days to scan 10K songs. Admittedly this was during the first week of launch so things might have improved since but it reqd dedication for me to get onboard (and a willingness to “re-buy” music it couldn’t recognize that I own).

    Finally they’re missing two features: First, something similar to Pandora or Genius bar to keep playing music. Second, they need to better integrate the “my collection” with the regular music interface. The mycollection side of things is much less intuitive.

    Will be interesting to see how it does though.

    • Lala didn’t seem to have any problems recognizing my songs, but I’m thinking that that might be because the majority of my collection comes from original CDs, so the tracks were probably easier to match.

      I also had the long upload problem (5 days for me on the first weekend it was open), but some of my friends have had much better experiences since because I think there’s a lot more track “matching” instead of full uploading going on. In the end, I think it’s still a great way to have access to my library anywhere I have Internet. Can’t wait for the iPhone app!

  • I love it because I can pretty much have my own library whereever,super easy to add music to stream

  • Lala has been a blessing. No other music service that I have seen matches them. Truly exceptional.

    Can’t wait for the iPhone app!

  • That iphone app sounds awesome. I can’t wait for that to come out.

    Peter
    http://www.thewebwar.com

  • Useless to me as I’m in Thailand and I can’t listen to diddly squat on their site.

  • Lala is awesome! I can’t wait for the iPhone app.

  • Lala doesn’t have the songs I have and when I searched for songs I listened to, about 70% of them are not there.

    Quit the hype. Most of the people commenting are probably trolls or are paid by lala. I hate having something hyped so much that when I visit and the experience doesn’t turn out the way it sounded, I get pissed.

  • http://resourcesandmoney.blogspot.com - December 16th, 2008 at 11:35 pm PST

    Its like hulu whose videos are mostly available for US users only. Maybe we could do a black hat for the location.

  • Sounds great. Will check it out.
    But…

    What happens to all that streaming music I bought if lala heads to the deadpool?

  • Wow, this is slick. thanks for introducing me to it. I’m definitely going to try it out. the cost is low enough to tempt me into it. Very smart pricing coupled with a great interface and convenient product structure = smart.

  • there was a webservice in australia which tried this. they ended up getting sued by all the major labels. i’d like to learn more about the contracts they have in place with copyright owners.

  • Agree completely, love it. I had a good time playing with Songza.com today too, but I keep coming back to Lala over the last few weeks.

  • I wanna try muxtape but spotify is ok for now. It is riddled by regular interruptions by some douche from Boreal Simian Sleet Excursion, though.

  • And what about deezer.com?
    available in more languages than any mentionned above. Totally free-streaming music, friendly interface, save your playlist, listen to the playlist of your friends, enjoy thematic webradios, download the music through amazon or apple… Partnerships with main labels, Iphone app…
    I would say it just bits lala by far but you never mentionned it (maybe because in Europe and french founders :-P just kidding!)

    • I’m sick of this Europe/Silicon Valley debate. It’s the French that go for two hour lunches and work 35 hours a week. Call it lazy or call it enjoying life. I live in the UK. Our ethos here aligns much more with that in the Valley than that in France. Stop calling it Europe, as much as the socialists would like to make it a one nation state, our general work ethic as a continent should not be stereotyped.

  • It doesn’t seem to like any of my m4p songs.

    Also, the mythical Facebook login is nowhere to be found. . .

  • Like the service, but it still doesn’t match the effortlessness of the Slacker Radio service.

    More likely to use lala for listening to my own collection and slacker for the actual music discovery/day-to-day station programming.

  • http://www.deezer.com is the real deal

    They have agreements with all the labels, the user experience is awesome and they have found business model that is NOT annoying.

    Excellent french start up

  • As an aside, are the first two comments here not a patently obvious forms of comment spam? Can you ban them?

    We don’t need this kind of unsolicited bahaviour.

    PS: Wish I could give Lala a try, I’m in the UK.

  • Shame about the crap name,it sounds like the tellytubbies.

  • This LaLa is pretty nice. I should find some time to try this one out.

  • Heres the question how do you get the service to really take off; how do you get children to use it they are the ones who influence what the parents buy. They dont have giftcards for the children to use and no parent will give there child there credit card info.

    • It looks to me like they have gift cards.
      There is a big ‘gift card’ section on my left navigation bar here.

      • I mean instores look at Itunes, Zune Marketplace and others they all provide giftcards in actually stores. You can find a Itunes giftcard almost anywhere a grocery store, electronics store, corner store etc.

  • Doesn’t play outside USA. No use to me. Tata to Lala

  • Last.fm has a much better social networking component, which is primarily why I use them. But I have to say, I used to love LaLa a few business models ago (when they were for CD trading, Netflix style) and barely use them at all now. They pushed all the old users out it seems.

  • What if you hear the song once, then you want to show it to someone before you make up your mind on buying it? playing once doesn’t work.

    Let me play the song as much as I want. Can’t we go to a Virgin Store and listen to a CD all day if we want to? The more you listen to it, the more you’ll want to buy it since you’ll want to put it in your ipod, or burn it on a CD to put it in your car

    I think it’s close to the formula but not there yet.

    The real formula is to device an advertisement standard/platform among all media distributors and players (including portable ones), let the music be free, and have it sponsored with 5-10 second ads.

    The standard would allow to track what artist is generating the ad revenue, and the earnings would be split among the copyright owners, whoever distributed to you, and the creator of the audio player.

    You’d make money on every play, which is better than selling a song once, and not have control over it. As it is, I get all my music legally via Amazon, but I buy used CDs. The stupid labels can’t get a dime out of every further re-sell of a CD and nobody is infringing copyright since no copies are being made.

    Money on every play, little, but on every play is the formula, and it can be paid by advertisers. People will always like free music. What would be best than a radio on demand, free music and keeping a healhty industry.

    • Ad models where the ad interrupts or plays before the music are no-gos. It’s been tried many times and not worked out.

      Since music is a medium that can be consumed passively (unlike video), the other ad model of showing ads on the page results in very low revenue per ad. Then you end up with a plethora of advertising on a site that must encourage active engagement and page turns.

      And if you want to share the song with someone else after hearing it once for free you can: 1) send them a link to have them hear it once for free, or 2) put down 10 cents and listen as much as you want.

  • @doryTony:

    Doesn’t play outside USA ?? Why??

    • DRM restrictions. Typically when a radio station/companies purchase license they do so for a specific region. Same goes for books also. Most books have US editions, UK editions, Indian edit etc. It is illegal to transmit for example a UK edition to US and vice versa. Sucks like the New york weather.

  • Very interesting… but didn’t we just see a LaLa post not too long ago that basically said the exact same thing? Hmmm….

  • For the user experience, you can thank the superb design skills of my colleagues from Yahoo, Mike Nino and Matt Fukuda. After I saw the amazing experience (and the product vision that it embodies) a few months ago, I pinged them about a designer job opening, but alas it was already filled.

    http://www.linkedin.com/in/mikenino
    http://www.linkedin.com/in/mattfukuda

  • I’ve been using LaLa since I first read about it on TC. The best online UI out there, plus for people like me, one listen is all I really want for the new Britney Spears album.

  • I love me some LaLa, but remain skeptical about the mythical iPhone app that I have been hearing about since October. When I first discovered LaLa I instantly recognized its appeal, and begin touting it to my friends as a true iTunes competitor. Given that Apple has the keys to the garden, I will be very surprised to see an app that renders the built in iTunes app all but obsolete.

  • I’ve had amazing experiences with Lala, too. It recognized nearly all my music (which admittedly I keep really neatly organized), and I can’t imagine a better implementation of music in the cloud. I’ve had some latency problems, but they may be on my end.

  • Don’t see anything here GrooveShark doesn’t offer.

    P.s., why does this story read like an ad? “That sort of makes LaLa perfect.” Not even any pros and cons…

    Are all TC stories just tech promos?

  • I have met the CEO in Palo Alto and I like what they are doing. He asked me to check out the site and I was impressed. I currently upload all my iTunes and love the service!

  • OK, I’m confused about what exactly the Music Mover does. Does Lala just scan and upload my music library–i.e. the list of mp3s (which would explain why Lala says it takes second/minutes to accomplish), or the actual mp3 files? Their website is unclear. When I manually add songs to my library, it’s actually uploading the files. With a 9k file music collection, that’s hardly minutes….

    • I’d guess they’re scanning tags and also trying to match a portion of the audio. It wouldn’t take nearly as long if they were only scanning text. Took me FOREVER

    • OK, it looks like the Music Mover app scans your library and tries to find tracks in their database that match my track info. The ones that match are automatically added to my Lala library (not by upload); the tracks they can’t find matches for on their side are then uploaded from my computer.

      And yes, it still takes a while even without lots of uploading. We’ll see how accurate their scans actually are. At least 95% of my music collection (of about 9k tracks) are tagged correctly because they were either ripped after CBBD identified them or downloaded legally from amazon/itunes/emusic.

  • As far as I know, you can still trade CDs on Lala if you enable it in your account settings. There are still a lot of the original CD-trading users on the site, if you’re looking to swap any of your old CDs.

    While the new Lala is nice, the original version of their site was even better looking. I do like the interface and idea, but I just don’t know if I would be willing to spend money there after my 50 free songs are used up.

  • Too bad it’s not available outside the US.

  • Yes, some LALA love! Yay! Now they need to make it accessible outside the USA.

    I think they have a great UI too. Good use of Ajax, simple page loads, clean, not too big.

  • I have been LOVING Lala. Although the music mover did blue screen of death my laptop - I gave it another chance on my other computer and it worked fine.

    I love the service, and I’m looking forward to the iPhone app. This is exactly what I was looking for (I was paying 15 bucks a month for Rhapsody).

  • I was one of the orginal Lala beta testers back in early 2006. I’m a huge fan of the service.

    The site is pretty darn amazing and sticky as hell. I spend most of my day logged in there. Only a few other sites have me tethered so closely.

    Trading IS still available. It’s a bit hidden and has to be enabled via your account settings. The trading has slowed down, but if newbies enabled this option perhaps it would pick up a again?

    I too can’t wait for the iPhone app. I’ve been a bit hesitant to purchase the 10-cent tracks (I’d rather trade for the CD instead), but will probably starting buying them in bulk once (or if) the app is released.

    Viva la Lala!

    ~ RSG

  • I started using it a month or two ago and Lala has changed my life. I’ve stopped using iTunes or Last.fm or any other music service.

    Once you start using it, it just makes so much more sense than any other way of listening to music. From now on all my music goes in the cloud, screw MP3s or web radio.

  • So, how is Lala sufficiently different from the old mp3.com and its Beam-It service to avoid being similarly killed by the RIAA?

  • Since I’m in Europe I can strongly recommend Spotify (open Beta). It’s much better than any other streaming service out there. However, for the time being it only available in the major European countries.

    Playback is instant and sound quality is Ogg Vorbis q5, which is very good. Search for it on Twitter to feel some of the buzz. Hopefully they will go for the US eventually. http://www.spotify.com

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