Lala Launches On-demand Free Streaming Music Service

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Yes, But What Does That Have to Do With The iPhone?

Just launched: LaLa is offering users the ability to listen to an unlimited amount of on-demand streaming music, for free, marking the first time this has been available legally. Their new tag line is “Play albums on demand, buy the ones you love.”

We wrote about this product a week ago, although the final launch product has additional features we did not cover in that post. The service is available here.

The company is pursuing music licensing deals with labels and will make music available as those deals are closed. Warner Music is their first partner, and will make their full digital catalog available.

lalascreen.pngThe new LaLa is aimed squarely at iTunes. Users can listen to full songs as often as they like. They can buy the physical CD with a couple of clicks, or they can (in a week or so) download the song. The songs are DRM-free, but are downloaded directly to the iPod. The only way for a user to then remove them is to hack the iPod. So while the songs do not contain DRM, the user is effectively barred from consuming the song cross-platform. The company says that future versions of the service will allow CD burning as well.

Prices for song downloads will be $0.99, the company says, but will vary for high-use users. If you listen to a lot of music on LaLa and participate in the community, song prices will be lower.

The digital tracks will be watermarked .aac files. They won’t stop you from transferring the songs to friends iPods, but the service will only allow one licensed copy of that watermarked file to work on Lala at a time.

The service launch is part of huge bet Lala is making on the future of online music. Licensing fees alone are expected to cost the company $140 million over the next two years. They’ll need an average revenue of $65 per user per year to cover the cost. But Lala sees the new service as an essential update to the way we experience and purchase music.

Lala’s bet is based on two beliefs: people want to own their music, and they want to sample it in the most interactive way possible. They saw the radio’s passive sampling experience evolving into Napster’s on demand experience. But Napster was illegal, and didn’t let you easily sync music where you wanted it. Lala’s new service promises a higher quality and more comprehensive service than has ever come before.

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