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.
Hide this

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Reader Comments

Subscribe: RSS

View by: Time | Thread

  1. identicon
    Bill Nguyen, 8 Mar 2006 @ 9:20am

    Re: grt debate - fr. founder of 'la la'

    Hi Mike,

    I really should be working, but I'm totally into this discussion. I'll try to answer the best I can:

    a) You're right on the comparision, we'll get the stats for online new/used music stores. I'm sure the gap will close but it will still be significant.

    With music, getting the CD is one problem but finding what you want is even harder. 'la la' search is built by some amazing folks and it will help you discover music through other members and through community search. You have to try it to see the difference.

    Once you find it, 'la la' has trading, purchase new, and soon integration into local record stores. Think of it like FedEx, the more you're willing to pay the faster you get it. You can always just 'la la' the CD for $1 but you'll have to wait - that can be anywhere from 3 days to a couple of weeks.

    b) Musicians don't make much from new CD sales. In many cases they net less than $.20 per CD. We give to musicians b/c we want to encourage more music. The part that I think is not 'right' is taking a CD, ripping, and then trading. It may be legal somehow, but it doesn't pass the ethical test for.

    c) Combining the past success and the model of 'la la' into one thread, I've been fortunate because I've always built stuff I loved not because I love a business model. It sounds goofy and a lot like a high-school counselor, but I make better choices for my customers when I'm building it for me.

    The business should work because people enjoy music and want to discover new music; places like Wal-Mart cannot provide the diversity necessary for selection (Irish dance, hip hop from Iraq, classical, etc.)

    If we become the right place for discovering music, we should own the lionshare of fulfillment. The network effect is very helpful for trading of course. Search, discovery, and purchase in one place - doesn't seem like it's done anywhere else for music.

    Last note on the musician contribution - maybe you're right - I just want to do it b/c music makes me happy and I want to support the artists. I just did it because I wanted to - no real logic :-)

    Swing down to Palo Alto - this could be a long conversation. Ping me and I'll get an invite code for Techdirt readers. We'll take the debate to our playground.

Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here

Subscribe to the Techdirt Daily newsletter

Comment Options:

  • Use markdown. Use plain text.
  • Make this the First Word or Last Word. No thanks. (get credits or sign in to see balance)    
  • Remember name/email/url (set a cookie)

Follow Techdirt
Special Affiliate Offer

Essential Reading
Techdirt Deals
Report this ad  |  Hide Techdirt ads
Techdirt Insider Chat
Recent Stories

This site, like most other sites on the web, uses cookies. For more information, see our privacy policy. Got it

Email This

This feature is only available to registered users. Register or sign in to use it.