James Delahunty
6 Jun 2007 3:45
A Silicon Valley based start-up, Lala.com, announced on Monday it will launch an "iPod compatible" online music service that will use free-play of online songs to attract potential buyers. The service will be offering music from the world's fourth largest record company, Warner Music Group, when it launches. It "says" it will sell DRM-free downloads, but considering they only offer downloads directly to iPod, and not to PCs, that kind of defies the point?
The company is in talks with other major record companies to expand the service with more music. Lala will offer free online song play without advertising, hoping to make up for licensing costs of playing the music online with sales of songs. "We believe over the next two years we might lose $40 million," founder Bill Nguyen said in an interview with Reuters.
He added: "We expect up to 70 percent of people will be freeloaders just listening to the music but around 30 percent will be buying music." With CD sales dropping 20% in the first quarter of 2007 and digital downloads unable to make up for it, the music industry is willing to experiment with new models and new ideas.
The world's third largest record company, EMI Group, started selling DRM-free music downloads through Apple's iTunes recently, a positive move for digital music.
Source:
Reuters