Everything Old Is New Again... Again

from the haven't-we-seen-this-before? dept

Is there some sort of rule that when discussing "new" dot com companies, the press is supposed to ignore the fact that they're nearly exact replicas of companies that were around during the first internet bubble? Or, even worse, are perfect replicas of companies already around? The latest is about a company called LaLa that is apparently positioning itself as a way to get "nearly free music." The specifics, however, show that this looks quite similar to plenty of other business models -- most of which didn't work. But that doesn't stop the press from writing glowing stories on the company that ignore both the inherent problems in the model as well as those who have gone before it. In this case, the company is simply a swapmeet. It lets users list CDs they own which they can then trade with other users for a $1 per trade for each CD received (and, you can only get CDs if you also give out CDs). This isn't a new idea by any stretch of the imagination. During the bubble years there were a bunch of online swap sites, and they all pretty much disappeared. However, if this company sounds familiar, that's because its model is identical to Peerflix, a company that launched last year -- except for DVDs instead of CDs. As we pointed out last year, there's a fundamental problem with the Peerflix model: people want to keep the good DVDs they have, while they're willing to trade the bad ones. In other words, markets like this get filled up with bad-to-mediocre content, rather than anything worthwhile. Also, while the article talks about "nearly free music" that's extremely misleading. First of all, you have to offer up your own CDs, which you paid for at some point (in most cases). Finally, while the article also notes that this is "legal," it leaves out the fact that if you trade your CDs while keeping ripped copies of the song, then you're no longer in such good legal shape. And, of course, given the recording industry's historic view towards any such activities, it seems unlikely that they'll look kindly on this offering.

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