May 18, 2006
LaLa.com and Embracing Sharing
The LA Times reports that “Sharing [Is] Still Divisive,” and this time the tool stirring the fires is LaLa.com, which allows individuals to trade their own CDs with each other. Someone recently wrote me to say LaLa.com is based on “facilitating piracy.” It’s sad that any time a novel sharing service comes out, the first instinct is to demonize it rather than find a way to embrace and monetize what music fans so obviously want.
LaLa.com is just like eBay in two senses. First, LaLa.com enables a more efficient market by reducing transaction costs in ways not possible in the offline world. Second, people already had the ability to sell their CDs via eBay — LaLa just modifies the model.
Don’t get me wrong — some are going to use LaLa.com in illegitimate ways, but many will use it for legitimate purposes. People who bought their CDs — and thus already paid licensors — have
the right to give away their own property in this way.
In today’s world, almost everything facilitates piracy to some extent. Computers
make copies; the Internet distributes copies. There is P2P, there are
darknets, there are sneakernets, there are campus lans, in 5 years
people may be swapping HD-DVDs worth of music and in the next 15 years maybe
a single keychain memory stick will hold the entire universe of recordings.
Artists will get paid in this world, but they’ll get paid differently and, I would contend, more.
Lala is certainly part of a larger structure that’s upsetting settled
business models. That doesn’t mean that it is simply “facilitating
piracy.” To define it as such is unfair.
Regardless, given the myriad other thoroughly convenient methods people
can unlawfully acquire copyrighted content, excuse me for not worrying
about Lala as a mortal threat. Downloaders (as opposd to uploaders) on
P2P have little vulnerability. Swapping CDs filled with mp3s is far easier and costs less than using LaLa.
And for what it’s worth: LaLa is giving 20% of its revenues to artists.
That’s a better deal than they ever got from used record stores. What’s more, LaLa is reportedly losing money on every CD trade.
It’s planning to use CD trading as a loss leader to sell CDs and online downloads — that’s right: LaLa only survives if it helps artists sell more records.
What will it take to embrace sharing and the sales-driver it could be?
Filed by Derek Slater at 1:44 am under General news
2 Comments
Like it or not (and businesses are certain to not like it very much), people can always trade, sell, or otherwise distribute their products, and barring heavy-handed contracts that would destroy the value of their products, there’s nothing that can be done about it. I’m actually surprised that radio-copying hasn’t become more popular or common, but that’s surely coming in the days when it’s too difficult to do easily in real life or online (read: never, I hope).
“Artists will get paid in this world, but they’ll get paid differently and, I would contend, more.”
I think there are busness models that can co-exist with sharing. If you think about it there are a number of bussnesses that give away stuff for free, in order to make money somewhere else.
TV, Radio, Google, all of them make money through advertising but give away their service for free. The question is what busness model will work for artists. I doubt fans will want advertising on their music. A creative busness man will come up with something. The problem for the record companies is that the new bussness model may see them as an unnecessary middle man.