Major Labels

WMG Invests $20M In LaLa’s 10 Cent Song Streams

Wmg
Warner Music Group has invested $20 million in an experiment by LaLa.com to offer 10 cent song streams from all four major labels. The label group also agreed to advertise LaLa via 25 million CD inserts in exchange for a greater share of ownership according to entrepreneur Michael Robertson. A dime buys unlimited web streams of a track and new Lala_beta
users get 50 free.

COMMENTARY: WHAT WAS EDGAR THINKING?
It’s time that Edgar and Lyor surrounded themselves at WMG with people
that actually…

understand today’s consumer.  Any 15 year old would tell them that they are making foolish bets.

Who will pay 10 cents to stream a track when they can do the
same thing for free via imeem? Napster also offers limited free
streaming, YouTube has the video and if you don’t mind bending the law
you can grab it free on Songza.  And last year WMG lost $18M investing in the Bulldog Entertainment Group, whose failed business plan was selling $3000 VIP concert tickets.

Lala deserves some credit for ongoing experimentation, but WMG only seems intent on burning cash.

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4 Comments

  1. I’ll first ask if you’ve tried the new Lala, because most commentary I’ve read sound like the person has not actually dug in and experienced it.
    I’ve tried it and have been playing around for quite a few days. It’s not a site that sells streams for ten cents. It’s an MP3 store that sells streams for ten cents. There’s a big difference. The goal is obviously not to sell ten-cent streams. The goal is to sell MP3s. I think Lala’s streaming offerings are a good way to encourage purchases. (It’s ease of use is an equally good way to encourage purchases.) And it’s well though out and easy to navigate. For browsing and sampling, it is as good as eMusic and will probably get better by the time it launches.
    And it’s a different class than imeem. On paper imeem looks great (free streams, option to purchase downloads) but it doesn’t function as well as Lala, and I personally do not want to buy music from an ad-supported social networking site. A site that specializes in music will get my money.

  2. Glenn, yes I did check it out.
    You are right. It is slick, but I’ll stick to my belief that 10 cent streams is a non-starter.
    Care to make a friendly public bet? Maybe a “Here’s The Bet” post now and then an “I was wrong” on both our blogs written by the looser? As in, “if this idea takes off on LaLa or any other web site a year from now you were right and I was wrong”…

  3. Why would anyone pay for streams now a days?
    The Lala.com interface is slick and easy to use but the very mention of paying 10 cents for streams is one of the stupidest things you could have your press people do.
    Stop it.
    Sweep that little fact under the rug and never mention it again. It’s still fresh so maybe you can pretend like it never happened. Hopefully you don’t end up in a Wired piece on how stupid the music business is.

  4. Wait? It is not 10 cents per play.
    When you said 10 cents per stream I thought you were saying it cost 10 cents every time you want to hear the song (I agree that is a non-starter!) but I listen to music on my computer all day long at work so this 10 cents is effectively complete ownership of the song for me.

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