Lala is going to start a new music service where you pay nothing to listen to your music online. There’s no subscription fee either. Lala will have to pay Warner Brothers (their only current major partner) a cent for each song played. They’re prepared to take some heavy losses though.
Nguyen estimated the 23-person company would pay $140 million for licensing fees over the next two years if member numbers grow as projected. Executives are talking with the other big labels: Sony BMG, EMI and Universal.
“We’ll be reporting some crazy losses at first but we’re prepared to weather the storm,” said Nguyen, who sports a boyish grin and flip-flops.
I hope whoever their investors are, they really believe in the plan. What’s really interesting about the service though, is that they’re planning a way to push music you buy directly onto your iPod DRM free without putting it in iTunes.
To download songs to an iPod, members must download a 3-megabyte plug-in that runs on all major browsers on Windows and Macintosh computers. Because the songs aren’t stored on the PC hard drive, the primary source for files pirated on peer-to-peer networks, Lala will dispense with traditional digital rights management, which controls which devices can play a song.
Founders were secretive about how the technology works, noting that they’ve filed for numerous patents. The technology worked well in demonstrations last week.
Senuti anyone? Ahem.
