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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  1. identicon
    Anonymous Coward, 5 Apr 2006 @ 11:44am

    I think it'll work, at least near term, because of

    Just look around at all the racks of CDs your friends have. What are they going to do with that investment? Trade them in for a buck or so and then buy one used CD for $6.99?

    So for $1.49 I can swap 1-for-1 a CD I'm done with for another one I want. I then have a physical CD to rip for home or player, use in other home systems, take to car, take to work, take to friends, take in a friends car for a roadtrip, etc. It's easy and the process is familiar to a lot of people with Netflix's and Blockbuster's success. lala.com doesn't take inventory, except for mailing envelopes and pockets a bunch off each swap. Seems like a service that'll make some money.

    Sure you can rip your whole collection, put it on an ftp server and swap music for virtually free with your "friends," but that's a big step for even me, let alone the less technical folks, who make up the vast majority. Plus how long do you really think it will be until most can shuffle music from home to phone to portable player to work to friends to car, etc. I'm in the Internet biz, as are many of my friends, and I'd say less than 10% of the people I know have a home digital jukebox set up, maybe half of those can port music to their cars (usually through FM kits). The physical CD will still be around for at least a decade.

    Usually /I/ overthink these things. Yes, pure digital everything is the way it /will/ be, but we always see a much slower broad adoption than we "visionaries," industry folks and early adopters like to think. Yes, iTunes is a great look at how all (or most) music will be distributed. And I know a lot of VCs are looking for the next one of those. But how many people thought digital movies, and movies on demand was the way of the future and passed on that dull, "so last decade" idea of mailing around actual physical DVDs? Bet they'd like to go back and get in on Netflix now.

    As long as longevity and revenue isn't dependant upon people deleting the music from their collection when they mail out a CD... but even this acknowledgement doesn't mean lala.com will fail because other Napster-esque sites exist. The /key/ is that CDs, and CD playing technologies, will be around and lots of us >= gen x'ers have a lot of CDs.

    Bill, I'll take a milkshake!

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